Omar Esparza
Senior Manager, Global Key Accounts, Automotive, Mexico and Latin America
Mitsubishi Electric
View from the Top

Diversify to Compete as an Industry

Fri, 09/01/2017 - 12:44

Q: How is Mitsubishi Electric’s participation impacting the development of the automotive industry?

A: Both private and public companies need to improve their technological processes for the country to keep growing. Mexico has gone through a technological revolution in the past 10 years, moving from its low-cost manufacturing foundation to a low-cost but high-quality production standard. Mexican labor has evolved with the industry and companies now recognize the country’s capabilities.

Previously, 100 percent of the equipment used in manufacturing operations was designed and manufactured abroad. Today, Mexican engineers participate in design processes to attract new investment projects. Mitsubishi Electric has become much more globalized in that sense. We no longer focus on talent and knowledge transfer. The company is now looking for talent and potential around the world, leveraging the needs of each region. We innovate so that our products will be adopted by capable local talent, and we identified Mexico as a country of opportunity.

Q: How could the current economic and political climate boost the national industry?

A: Exterior political challenges will push all companies in the automotive sector to become more productive and cost-effective. Regardless of size, all industry participants must make technology one of their priorities to remain competitive as part of a long-term growth strategy. Before, the lowermost levels of the production chain usually had few demands in terms of automation and technology integration. The work was artisanal but relying on these types of companies left suppliers vulnerable. After years of depending on imported components, bigger companies are now helping the local supplier network to grow and develop the necessary strengths to compete in an industrialized environment.

Q: How can Mitsubishi Electric incorporate the latest technological trends into its business development strategy?

A: Market diversification is the key to developing our presence. German companies often supported other German companies, while Japanese players did the same. But to truly participate amid the new market challenges and technology needs, we need to expand and overcome country borders. In Mexico, this is happening more often as we expand from an initial client portfolio of almost purely Japanese companies. The more open we are to European and US standards, the more we can collaborate with other players.

Open platforms are no longer simply an alternate business strategy because of the need for efficiency in the globalized market. Now, compatibility is a requirement. Mitsubishi has worked for years on this subject, developing what is called our e-F@ctory concept. It operates under the same principle as Industry 4.0 or the internet of Things, based on connectivity and obtaining crucial data from manufacturing processes.

Our goal is to offer the best cost-benefit results depending on the technology clients acquire. We want companies to understand how our technology works, so we are transparent about how their investment will develop. The last five years have been crucial for our presence in Mexico. The company is a strong player here and although we could grow indiscriminately, our goal is to be selective with our partners.

Q: What is Mitsubishi Electric’s perspective regarding the future of the automotive industry?

A: The market follows economic trends and though there may be uncertainty at the moment, we are confident it will turn out for the better. While NAFTA is a trilateral agreement and Mexico has much to offer, we hope the political circumstances serve as a lesson for the Mexican government regarding its dependence on the US and therefore its vulnerability if it does not diversify. In the meantime, Mitsubishi Electric remains committed to its relationship with Mexico, demonstrated by the fact that we have opened new operations facilities in Queretaro’s Technology Innovation Park. The country is the entry point to the Latin American market and we have to move forward with our plans no matter what.