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Chihuahua Automotive Cluster, Preparing for The Next Step

By MBN Staff | Wed, 08/05/2020 - 17:03

Q: What are the main advantages that Chihuahua offers to potential automotive investors?

A: The state developed a strongly automotive-focused work culture after four decades of having a strong exports-oriented manufacturing industry. This work culture is based on meeting quality standards and industry requirements. Chihuahua’s strategic location in northern Mexico also offers logistics advantages. The state is part of a natural automotive logistics corridor targeting the US, with the border only a few hours away by car from the state capital. Additionally, there are more than 10 academic institutions that are constantly aligning their study and training programs with the needs of the automotive industry and students have the possibility to do internships at automotive companies.

Q: What is the cluster’s strategy to attract investments to produce components for the car of the future in Chihuahua?

A: A company will want to invest in a region when the proper conditions for investment are in place. Academic institutions must be ready to support the industry’s demands, the local government must understand what needs new technologies address to develop regulations accordingly and local companies need to ramp up their product and service offering. When these conditions are in place, investments for the production of advanced components will arrive on their own. There is little point in promoting investments if the proper conditions in the state are not there.

Q: How is the cluster working with both the private sector and the state government to ease the transition to new technologies?

A: The cluster works as a bridge between government representatives, private companies and academic institutions to identify the new needs of the industry and to build synergies between all players. When we detect a new need in the sector, we support our members by offering special training on how to fill that gap or bring in expert speakers to present the new technologies. It is important to help automotive players gain visibility on these needs so companies, government dependencies and academic institutions can make informed decisions accordingly. Additionally, the Chihuahua Automotive Cluster helps its members to take advantage of programs sponsored by the state government to develop the sector. This includes support to earn certifications, training programs or the development of new manufacturing processes. The cluster’s objective is to develop a medium- to long-term strategy for the state’s automotive industry that highlights the most beneficial factors that can strengthen the industry and aid its growth.

Q: What is the Chihuahua Automotive Cluster’s strategy to develop the capacities of local companies?

A: When a local supplier lacks a certain skill or capacity demanded by the industry, the cluster looks for agreements in which buyer companies that demand these processes help develop the capacities of local players. No company can cover the whole value chain, so local suppliers should have the opportunity to offer services or supply products that are not the core business of the client. These supplier-development strategies include having the buyer train or even invest in its supplier so that new processes are available in the region.

The cluster has found that local suppliers usually have covered a substantial part of the process that the industry demands, but they are not cost-competitive compared to similar suppliers in China. Local companies must go beyond merely developing the technical capacities needed to offer a manufacturing process. They must analyze and understand what harms their cost-competitiveness and address that challenge.

Q: What are the main gaps that you have identified in the Mexican Tier 2 supplier base?

A: Mexico imports a huge volume of consumable products and manufacturing technology for the automotive industry, such as sensors and robotic equipment. The Chihuahua Automotive Cluster has identified several technology gaps in Mexico related to products and services, such as quality forged components that meet client expectations, die and mold maintenance or strong metal sintering capacities. These segments are huge areas of opportunity for local players to develop their capacities. Areas such as the local production of molds for plastic technologies are highly technologically-challenging for Mexico, for instance.

 

The Chihuahua Automotive Cluster is an association of automotive companies, government agencies and academic institutions focused on fostering the growth of the automotive industry in Chihuahua 

MBN Staff MBN Staff MBN staff