News Article

Automotive Clusters Discuss Next Steps

By Alejandro Enríquez | Thu, 05/21/2020 - 13:42

Mexico Automotive Cluster Network, alongside the clusters of Center Region (Puebla & Tlaxcala), State of Mexico, Coahuila and Chihuahua discussed the upcoming challenges the sector faces in the face of USMCA’s enforcement on July 1.

The Mexico Automotive Cluster Network was created in 2019 as the national association which groups nine automotive clusters with more than 500 members in the country, covering the states of Nuevo León, Querétaro, Coahuila, Chihuahua, Puebla & Tlaxcala, Guanajuato, San Luis Potosi, the State of Mexico and La Laguna region. Director General of CLAUT, Manuel Montoya, is the current President of the network.

Hosted by Cluster Industrial, the webinar on USMCA detailed how important the role of the clusters is when facing an unprecedented crisis such as the one the industry is experiencing. "A cluster is a bridge, a communication enabler. We have a platform to communicate opportunities and needs, we ought to promote this communication to be efficient and effective," said Fabiola Aguilar, Director General of the Coahuila Automotive Cluster and the Advanced Manufacturing and Automotive Cluster of La Laguna. She also highlighted the role of different stakeholders in the industry, including, government, research institutions, universities, investors and companies. 

During the COVID-19 pandemic, the automotive cluster network has conducted different strategies to help companies in the industry to prepare for the eventual restart in operations. Webinars, surveys and strategic information have been essential to provide a sense of certainty to companies in Mexico. Collaboration has been closely with INA on the guidelines the government has set for reopening business. 

The Director General of Central Region Cluster (CLAUZ), Monica Doger, highlighted the new elements USMCA will bring to the way international trade is conducted in North America. "USMCA provides certainty and competitiveness for the region. There will be clear rules for Mexico to strengthen the trade relationships among its parties" she said. As for the opportunities the treaty will bring to suppliers in the region, Director General of Chihuahua Automotive Cluster, Melissa Baca, detailed the upcoming investment environment. "USMCA aims to bring back the power to North America and specially to the US. For some companies it is a greater risk to continue having their supplier base in China than anywhere in North America," she said. Baca also analyzed other variables around the regionalization of supply chains in North America. COVID-19 will remain part of the new normal under which companies will operate, while the economic impact will deepen in the short-term.

The positive elements fostering upcoming investments in Mexico include specialized human resources. "In the US the median age of specialized labor remains high," she said. Production and operation costs in Mexico will also be key. On the other hand, lack of tax incentives as well as a volatile government – affirmed by specialists – could hinder upcoming investments. "For those suppliers looking for low costs and high volumes, China will remain an option. But those looking for better conditions and jobs will move into other regions" she said.

Finally, on the sanitary protocols needed for the industry to resume operations, the floor was taken by Director General of the Automotive Cluster of the State of Mexico, Elisa Crespo. "As leaders of the clusters we immediately took action to see what we can do amid the pandemic," she said. Crespo also highlighted the uneasiness regarding the government first declaring the automotive industry as essential, then taking that back to finally providing a period of grace between May 18 and June 1 for companies to submit the necessary safety protocols to the IMSS.

The data used in this article was sourced from:  
Cluster Industrial
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst