Arturo Cadena
Director General
Cadena Automotriz
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Insight

Building the Components of Success

Mon, 09/01/2014 - 16:16

After 33 years in the industry, Cadena Automotriz has witnessed how the aftermarket has changed. In the past, most products were imported from the US. Eventually the market opened and some products came from China and even Taiwan. “30 years ago, there were very few importers but now more and more are coming in,” says Arturo Cadena, Director General of Cadena Automotriz. The changes in the aftermarket have forced companies to specialize. In the case of Cadena Automotriz, the company specialized in automatic transmissions, which requires many specific components. Although the OEMs are in charge of assembling transmissions, they acquire components from external suppliers. “No one in the industry manufactures a transmission itself,” explains Cadena, which is why it is important for the company to find the right suppliers for each part. Cadena Automotriz is a distributor in the aftermarket, catering to the same manufacturers that work with OEMs. Therefore, a transmission that needs to be repaired will require only a few products among those that Cadena Automotriz offers in the aftermarket. The brands that Cadena Automotriz distributes include names such as Transtec, which manufactures transmission kits and power steering kits; Alto, an American company specialized in manufacturing friction and steel plates as well as bands, filters, modulators, and seals; Filtran, the global leader in filtration systems; Rostra Precision Control, the largest manufacturer of cruise controls and transmission products in the automotive aftermarket; and powertrain solutions leader BorgWarner.

Cadena Automotriz keeps a product portfolio that is constantly upgraded to cover the market’s needs. “Parts change, new patterns emerge, and new parts come so we should seek to have the best product selection and the best suppliers,” explains Cadena. He visits the manufacturing plants of each supplier his company works with, whether these are located in the US, China, or Taiwan, in order to oversee the products’ manufacturing process as part of a quality control mechanism. He also pays attention to the customers these factories sell to. “If they have customers in the US, it speaks of high-quality products since the standards in this country are very rigid,” explains Cadena. Although Asian suppliers are sometimes believed to have low-quality merchandise, Cadena has found that they supply a wide variety of products with diverse quality levels. “It comes down to finding the right manufacturers. The products that are available in China and Taiwan are varied; if you find a product in a price range that goes from US$3 to US$10 then many dealers in the Mexican market prefer the US$3 products because these are cheap, but what they do not realize is that those products are not a long-term economic alternative to quality,” explains Cadena. “We are focused on finding competitive products that offer the best cost-benefit ratio and that are an investment. There must be awareness on the consumer’s side about purchasing value-driven components instead of the cheapest product. We provide our customers with the necessary information to make the decision, but they have the final say when it comes to choosing a cheap product or a quality one,” says Cadena.

Since automatic transmission is a niche market, Cadena Automotriz has a competitive advantage. “In a city like San Luis Potosi, there might be 50 specialized engine or suspension workshops but only four or five are specialized in transmission. In a bigger city, like Guadalajara, there are probably seven to ten specialized workshops. These workshops usually have a spare parts section that supplies the shop,” says Cadena. Cadena Automotriz sells to these sections and ships to customers across the whole country. As the automotive industry in Mexico keeps growing, Cadena Automotriz has to look for new strategies to keep up with the needs of the market. The first approach consists of expanding the range of products included in its transmission oil catalogue. In 2006, the company began selling transmission oil and lubricants as a response to client demand. Right now, Cadena Automotriz works with a company in the US and distributes not only transmission oils, lubricants, and additives, but also gasoline engine oil, diesel engine oil, hydraulic oil, and industrial oil. The next step in the company’s growth strategy is to open new retail shops. San Luis Potosi is already home to one of these shops and the company is planning a second one. However, the most important step for the growth of Cadena Automotriz will be the launching of its own suspension brand in the coming year.