Stefan Kürschner
President and CEO
Daimler Trucks Mexico
View from the Top

Coahuila Plant Expansion Prepares for Surge in Trucking Demand

Tue, 09/15/2015 - 16:10

Q: What does the expansion of Daimler’s Coahuila plant mean for the company’s Mexican operations?
A: Our manufacturing plants in Santiago Tianguistenco and Saltillo are crucial for our company, since they produce more than 50% of all Daimler trucks sold in the Mexican market, with approximately 58% of the total production being exported. For this reason, we find that it is essential to constantly invest in development. Only a couple of years ago, Santiago Tianguistenco’s plant received a US$45 million investment to expand the workforce and to optimize production processes. In 2009, when we opened our Saltillo plant, there was no need for expansion, however, due to the success we are experiencing with the Cascadia DD15, this is happening now. We are experiencing intense demand, so production has been boosted and we anticipate that capacity must be extended.

Q: The productivity of your Saltillo plant exceeds other North American plants. To what factors do you attribute this phenomenon?
A: In 2014, Daimler sold a total of 2.55 million vehicles, 495,000 of which belonged to the trucks division. The Saltillo plant produced over 180,000 Cascadia trucks since its opening, and the Santiago Tianguistenco plant has manufactured 350,000 Freightliner units to date. This is the result of having the adequate machinery and talent. The Saltillo plant produces 200 to 250 trucks per day using advanced manufacturing techniques to guarantee high quality and dependable safety standards in each truck. It is also strategically located in a city close to the source of basic raw materials used in this sector, and is more accessible for our clients and suppliers due to its modern infrastructure.

For Daimler, product responsibility requires a combination of three things: the greatest customer benefit, the highest safety standards, and maximum eco-friendliness and efficiency. Our Saltillo plant meets the most demanding requirements, including residue treatment, co-processing through advanced technologies, and the recycling of 90% of all materials used. This manufacturing plant is an ecological standard for our production sites across the continent.

Q: How are your distributors, particularly in the north, affected by local preferences in used trucks?

A: This is one of the challenges we have to deal with, and it is one of the main reasons we support the different government initiatives to improve the country’s regulations in the automotive industry. We have been working for more than 40 years on alternatives for our local clients that involve financial schemes with customized scenarios. Sometimes our clients’ business strategies require a semi-new truck, and we can help satisfy this necessity. Through the many years that Daimler has been operating in Mexico, we have strengthened our distributor network to obtain national coverage, but there is always room to expand. Our network is comprised of over 90 sales locations that include aftersales services ready to meet any requirements in a quick and reliable way.

Although we have established solid relationships with our dealers, we are constantly aiming for process improvement in terms of communication. The company has specific programs focused on providing clients with comprehensive service, and our dealers receive theoretical and practical training sessions to deliver first-class attention.

Q: The heavy duty OEM manufacturing segment is increasingly competitive. In what areas can Daimler Trucks make its mark and achieve a steady profit margin?

A: We are conscious of the future of the transportation industry, which is why the company is investing in new technology systems for autonomous driving, such as the Highway Pilot. This is the only system available for trucks that provide a sensor and a camera to facilitate safe driving. The Inspiration truck is another inventive vehicle that has the highest self-sufficiency degree in the Americas. Our connectivity platform, Freightliner Link, is capable of reading minute by minute information sent from the truck’s engine, transmission, brakes and cabin, in order to increase business productivity and profitability.

Freightliner has also developed the Real Cost of Ownership guidelines, a collection of key productivity factors such as fuel efficiency, technological integration, security, and quality. As part of our commitment to our clients in Mexico, and in accordance with our goal of becoming the leader within the Mexican market, we create solutions to contribute to business growth and profitability. In response to our clients’ requirements, we are the first automotive company to have a price list in Mexican pesos, offering certainty and easeing the financial planning for companies operating in the country, regardless of the fluctuating exchange rate. Overall, one of our main goals is to continue driving the development of the Mexican automotive industry, as it aims to become an international exporting power.

Q: Are the authorities doing enough to enforce tighter vehicle age and emissions standards to stem the flow of used trucks across the border?

A: The Mexican federal government, supported by different institutions that regulate the automotive industry, implemented a passenger and cargo vehicle renewal program with the objective of easing the process of used vehicle exchange. Last year, Daimler allocated the most units to this program, adding up to a total of 1,935 trucks and buses for replacement. It is the responsibility of OEMs to evaluate and propose strategies that promote effective governmental regulations in the Mexican market. Mexico is one of the most valuable countries for the automotive industry, and in 2014 over US$21.5 million worth of freight motor carriers were exported, making this country a global leader in this sector. According to the World Trade Organization, factories based in Mexico provide eight out of every ten vehicles imported to the US. OEMs must offer attainable financial terms and programs to invite freight and passenger transport companies to renew their fleet.

Q: How many trucks will be manufactured by Daimler for the Super Copa Telcel?

A: Daimler has a long history of being part of automotive sporting events and we are one of the main sponsors of Super Copa Telcel. The company will participate with 12 Business Class M2 Freightliner trucks, created with special characteristics and configurations to achieve safe and fast performance. These units are equipped with the most advanced technology that increases durability and provides safety to the drivers. These sporting events present a challenge in terms of quality, efficiency, safety, and vehicle performance, and create an opportunity to prove Daimler’s technical ability on a global and local stage.

Q: What is Daimler Trucks doing to be an employer of choice, given the competitive automotive labor market in the State of Mexico and Coahuila?

A: Daimler Trucks has a strong commitment to the Mexican community. As part of the company’s aim to become market leader, Daimler continues to invest in its two manufacturing plants to increase productivity, and create more job opportunities for local people. We try to involve surrounding academic institutions to promote the abilities of younger generations in the business environment. We have created different programs with the State of Mexico’s CONALEP to help students gain work experience and improve their knowledge. In 2013, CANACAR, UTL, and the Federal Training Institute (IECA) started the Grassroots Operator Training program, which trains potential truck drivers through practice centers and has developed a generation of graduates in just one year.

Moreover, we also take care of the people already working with us. For over 30 years, Daimler’s production plant in the State of Mexico has operated a social center dedicated to employees’ wives and children, where they can take English and Computing courses free of charge. It also has one of the biggest training centers for developing talent through service, product, and manufacturing workshops. Until now, Daimler Trucks have generated more than 82,700 direct jobs worldwide, 16,000 of which are in the NAFTA region with Mexico representing more than 6,000. In September, the new plant in Aguascalientes will create further employment, as part of our strategic alliance with Renault-Nissan.