Sergio Mendoza
Chihuahua Automotive Cluster
View from the Top

Cluster Focus on Bolstering Local Advanced Manufacturing

Tue, 09/01/2015 - 13:10

Q: What makes Chihuahua an attractive location for automotive companies looking to invest in Mexico?

A: Chihuahua began its internationalization efforts in the late 60s, when a group of executives got together to define a strategy that would propel the state’s economy in the right direction. After due research, it was decided that the state would reach out to international companies that could take advantage of lower labor costs. We now have over 200 automotive companies in the state, 70% of which are located in Ciudad Juarez.

Q: What important investments is the state working on?

A: In 2015, Ford Motor Company announced the arrival of its new engine plant in Chihuahua. They will manufacture about 700,000 units of a new 3-cylinder engine every year, doubling the size of Ford’s current plant in the city. Bombardier Recreational Products also has significant expansion plans, as they will now build additional models in a second Ciudad Juarez plant. In the same way, Superior Industries just inaugurated their fifth plant in the city of Chihuahua, and other Tier 1 companies are growing significantly. All of these changes are merely the consequence of the positive changes that Mexico’s automotive industry is undergoing. Overall, Chihuahua’s strategic location between the Bajio area and the border gives us an added advantage for certain industries, especially the automotive sector.

Q: What techniques is the cluster using to shift Mexico toward a more world-class manufacturing mindset?

A: Firstly, we must understand the environment before we can change it. We have held meetings with different industry players, plant managers, and customers, and we have realized that one of the main areas of opportunity in the country is the lack of large Mexican players in the industry. Therefore, we must create opportunities for Mexican entrepreneurs to be successful, teaching them how to take risks and learn from their failures. However, to be successful with this strategy we need identifiable players that can implement complex manufacturing and research projects. The cluster is currently working on strengthening its own structure, so we are able to support the new suppliers coming to the state with whatever requirement they may have.

We want every higher education institution to choose an industry specialization in their R&D efforts. They are currently very broad in what they offer, and that does not match the industry’s trends when it comes to manufacturing processes. Through specialization, the competitiveness of each academic institution could rise to world-class levels in their specific field. This allows manufacturers to stick to what they know, and limit both their research efforts and economic expenditures when given new product specifications. The more specializations, the broader the field of knowledge the state will have.