Juan Antonio García
Strategic Planner
Abastecedora de Productos Automotrices
View from the Top

Electromobility a Distant Reality for Mexico

By Antonio Gozain | Tue, 07/26/2022 - 17:00

Q: What are the challenges of manufacturing in Mexico?

A: The country continues to struggle with supply chain problems, which makes manufacturing more complicated. It has been difficult to import materials due to logistics costs, a problem that also affects customers.  

Q: What added value do Abastecedora de Productos Automotrices’ (APA) products offer to clients?

A: We are Mexican manufacturers in a market that is dominated by Chinese products but we complement our catalog with imported products to remain competitive in the market. This is our added value: we are both manufacturers and importers.

Of our portfolio, our main strengths have always been motor mounts and molded hoses, which we have been manufacturing for many years. We are now offering more strut mounts and increasing our heavy equipment line. We have 3,500 parts in our portfolio and we plan to expand it to satisfy the needs of the market.

Q: How have you built a loyal customer base in a mostly price-driven market?

A: Price is the most important aspect but a good price without good quality is not attractive. Our competitive prices and quality have allowed us to build a loyal customer base.

Q: Why is demand for auto parts growing regardless of low vehicle production?

A: The aftermarket sector is booming because there are no new cars available, so the second-hand vehicle market is growing. Buyers are also taking better care of their vehicles. The trade war between China and the US has also impacted vehicle costs but both countries will never end their commercial relationship regardless of current disputes.

Q: How can Mexico take greater advantage of nearshoring?

A: Mexico needs to develop its own manufacturing capabilities, which should be further supported by the government. The US had industrial cities, such as Chicago, Illinois, or Detroit, Michigan, but they relied on China. Automakers are now looking for opportunities in Mexico but the government needs to promote more incentives to boost manufacturing.

Q: How has your App for iOS and Android transformed the buying experience for your clients?

A: I am the third generation on a family business. The challenge in a country such as Mexico is to convince everyone of the transition from physical management to digital transformation. We have been integrating on our new platform many processes, such as purchases, customer services, sales monitoring, customer balance management, customer communication, catalog administration, online order operation and data analysis, among other things. It has a self-designed architecture, implemented and planned for data analysis, mobility in its accesses and 100% interactive with users.

Q: How do you expect the arrival of new technologies, such as EV, in Mexico to impact your business?

A: We sell motor mounts to reduce the vibration of ICE vehicles but EVs do not need them, so the growth of the EV market in Mexico is concerning. However, the country will not transition to electromobility in the short term because Mexico relies on oil and no government will sacrifice a third of the country’s revenue. The country also lacks infrastructure for EV and its energy is extremely expensive. Despite the transition toward electromobility in other regions, Mexico and Latin America are still years away from achieving it. 

Q: How does APA expect to close 2022?

A: We will face some challenges like product shortages and the recession but we are also experiencing growth opportunities. Thanks to the shortages, new clients are reaching out to us, including some from the US. APA has always been well managed and we are a strong company that is ready to face any obstacle.

Antonio Gozain Antonio Gozain Journalist and Industry Analyst