Koyo Joint: Shared Benefits Key for GrowthBy Alejandro Enríquez | Wed, 07/15/2020 - 17:03
Asian companies follow a win-win vision when investing in Mexico by getting the most out of the Mexican workforce, while sharing their engineering know-how. However, advances in engineering and quality capabilities are necessary to grow the local supply chain, says Makoto Aida, President of Koyo Joint Mexico. “Companies need to improve engineering and quality so OEMs request more pieces from companies like Koyo Joint Mexico. That way, we can bring more operations to the country that can foster growth and the generation of more jobs,” he says.
Koyo Joint Mexico is a subsidiary of Koyo Machine Industries. “We are part of JTEKT. When we heard Toyota was coming to Guanajuato, we planned our arrival to Mexico accordingly,” Aida says. In Mexico, the company has invested US$10 million to manufacture steering intermediate shafts at its plant in San Luis Potosi. It has been operational for two years.
Not ready to rest on its laurels, Koyo Joint Mexico is aware of the improvements needed to expand its business to other OEMs arriving to the country. “We had no idea BMW was coming. It is within our future plans to be a supplier to BMW, but we need more engineering and quality,” Aida says. Nevertheless, key differentiators for Koyo Joint Mexico’s components are their safety and functionality. “Clients expect certain safety standards and our products can surpass those expectations,” he says.
For companies foreign to the North American region, USMCA has highlighted the need to favor local supply chains. In MAR 2018, only 11 percent of the interviewees considered supply chain underdevelopment and lack of integration as the most important factors hindering Mexico’s evolution beyond a manufacturing site. However, Asian companies have identified difficulties when finding local suppliers. According to Aida, Koyo Joint Mexico has been looking for local suppliers in Canada, the US and Mexico without success. “We have looked for a mold supplier with a special focus on heat treatments. We have been screening suppliers across the country and we have realized there are very few,” he says.
Tier 1 companies have room to transfer more operations to Mexico as automotive manufacturing grows in the country. Though Koyo Joint Mexico manufactures three different components, only one is produced in Mexico. The other pieces are manufactured in China and Thailand. “Koyo Joint International is thinking about transferring part of that production to Mexico,” says Aida. The company’s overall strategy is to promote the high performance of its products to new clients in the US, Latin America and Europe.