Cooperation a Stepping Stone for DevelopmentBy Alejandro Salas | Wed, 08/05/2020 - 05:00
The arrival of new OEMs to the Bajio region means opportunities for local players, says Daniel Hernández, Director General of the Queretaro Automotive Cluster. In Queretaro, auto parts manufacturers are stepping up their operations to support the assembly operations of BMW and Toyota, which from 2019 are assembling light vehicles in neighboring San Luis Potosi and Guanajuato. “Queretaro has consolidated a strong supplier base with over 100 Tier 1 suppliers catering to virtually all vehicle systems,” Hernández says.
Many Queretaro companies have been awarded projects to supply for the newly-arrived carmakers, which translates to an economic trickle-down for the state even if none of these OEMs set up shop in Queretaro. New opportunities also bring new challenges with increasing demand enticing local players to solve the sector’s challenges and strengthening the state’s automotive industry. The Queretaro Automotive Cluster plays a key role in this cooperation as the local association that brings together the interests of local automotive suppliers, universities, research centers and state authorities. With over 90 associates, the cluster is in charge of boosting the competitiveness of the state’s automotive sector.
Hernández says Queretaro took significant steps in 2018 toward solving two transversal problems: the lack of a local tooling market and high staff turnover rates. He highlights that the state received several investment projects to produce tooling equipment locally, which has piqued the interest of automotive companies. “Queretaro is now seen as a strategic zone to develop and produce this equipment,” says Hernández.
The state is now home to centers for maintenance, production and re-engineering of molds and dies and Tier 2 suppliers have invested in strengthening their in-house tool shops. “In some cases, these shops become a spin-off of the original business and companies start selling tooling equipment to their clients,” Hernández points out. Additionally, the Technological University of the State of Queretaro (UTEQ) and the Queretaro College for Scientific and Technological Studies (CECYTEQ) have developed programs to train technicians in tooling design and Queretaro’s Institute for Tooling continues to train the talent to manufacture this equipment.
In terms of staff retention among automotive companies, Hernández says the cluster has worked to curb turnover rates by creating knowledge about this challenge, monitoring the local labor market, homologating staff criteria and empowering member companies to create better staff retention policies.
Automotive companies based in Queretaro generally pay higher wages than in other states of the Bajio region, which has helped keep turnover rates low compared to neighboring states. However, the problem remains. Hernández says local companies need to change how they relate to workers and develop a greater sense of belonging and development. “Rather than focusing on completing work crews, companies need to develop conditions that guarantee the quality of life of collaborators,” he says.
According to Hernández, adjustments to rules of origin in the USMCA deal will introduce new opportunities, particularly in the amount of value that Tier 1 companies can purchase from local Tier 2 suppliers. “USMCA will force companies to increase their local content,” he says. “Mexican players can capitalize on these changes and grow as long as they are technologically prepared and meet quality certifications.”
To help member companies develop these capacities, the Automotive Cluster of Queretaro collaborates with JICA to link Mexican players with Japanese automotive companies. “Our goal is to improve manufacturing processes, quality indicators and waste reduction among local Tier 2 suppliers through technical assistance with Japanese experts,” says Hernández. In terms of cooperation with local players, projects with the National Network of Automotive Clusters, which was created in 2019, will help deepen the cluster’s work on supplier development and tracing. “Among other strategies, this network will help regional clusters raise awareness of highly competitive Tier 2 suppliers that can strengthen the region,” he says.