Lighting Leader Seeing Mexico's R&D PotentialMon, 09/01/2014 - 11:24
Ignacio Moreno, President and CEO of HELLA Lighting North and South America, is confident that his firm’s automotive lighting and electronics solutions have earned the reputation of being crucial to a vehicle’s safety and CO2 reduction. This reputation has been added to over 40 years as HELLA has been present in Mexico since 1964 through its core business in high quality lighting and electronics solutions. As OEMs continuously increase their presence in the country, HELLA has already expanded its production footprint to four lighting plants and one electronics plant in Mexico, now totaling more than 3,000 employees across the country. By 2020, HELLA aims to see its sales figures steadily increase across all business divisions and foresees the employee base rising up to 6000.
Moreno explains that the company’s wide-ranging product portfolio has been key on several levels: it has sealed HELLA’s reputation across the megatrends of the automotive industry, safety, comfort, styling and the reduction of carbon dioxide emissions while expanding the company’s client base. “70% of our local production is sold to our clients in Mexico and they export 80% of it. The remaining 30% is exported directly to the rest of our customers to North and South America.” says Moreno. However, HELLA’s growth is not solely reliant on the continued entry of potential customers, but on implementing a strong, vertically integrated business model that will be able to deal with the rising wave of demand.
In order to set itself on the right path in Mexico, HELLA has implemented two strategic decisions in order to assure the growth of the company. The first is related to production operations: “We decided to concentrate, irrespective of the destination of the final product, all of HELLA’s manufacturing efforts for North and South American Markets in Mexico,” Moreno comments.
To archive this target, an investment of over US$90 million was made in a new lighting facility in Irapuato, Guanajuato. This plant already started production in 2013, producing headlamps and rear combination lamps for HELLA’s OEM customers. “The production facility is strategically located and is setting a technological benchmark within the HELLA Group. It is equipped with HELLA LED lighting products and contributes to the reduction of carbon dioxide emissions, helping to create creating a cleaner environment. Over the next few years, we will create more than 1,500 jobs, with our company forming an attractive career path for talents in the region of Guanajuato,” comments Moreno. For the company’s vertical integration approach to be successful, it was also important to localize its supplier base. According to Moreno, besides bringing new technologies to the market, localizing the supply base brings a significant cost reduction which is ultimately passed on as a benefit to customers. “Therefore, in its ongoing search for Mexican suppliers, HELLA brings in the same extensive audits it uses in other parts of the world to guarantee its standard levels of quality.
The second strategic decision entailed taking in-house responsibility for the full scope of the projects. This covers all processes from acquisition design and development to production and aftermarket. “Prior to the aforementioned approach, HELLA in Mexico was not focused on R&D, but only on production”, says Moreno.
This holistic approach was consolidated with the launch of one R&D Center for electronics located in the ITESO Technology Center and another center for lighting located in El Salto, Jalisco right next to the lighting production plants. “More than 100 employees are currently working in the area of R&D and are participating in special training, lasting more than six months at our Germany headquarters,” explains Moreno. These training programs allow Mexican engineers to boost their knowledge of HELLA’s lighting and electronics solutions, from technology, processes and particular solutions rolled out worldwide. He adds that that “all of these are recent Mexican graduates who were recruited in their final year of university so they could be properly trained by HELLA prior to working in our facilities. This was done as it is challenging to find existing engineers specifically trained in these fields.” To tackle this, HELLA has been in discussions with representatives of technical schools and universities to develop holistic academic programs to fit the required engineering skills it needs.
In Guanajuato, HELLA has donated technical equipment to the Irapuato Superior Technological Institute (ITESI), which will enable students to gain better hands-on, understanding the processes and the operating structures involved in HELLA’s facilities. This provides the double benefit of helping the students expand their practical horizons and provides a source of skilled labor for HELLA. Moreno believes strongly in this approach as on a broader scale, it helps to create awareness among local engineering students about new technologies and global trends. “This investment will take time but it is a fundamental step in providing clients with locally made high technology products in the near future,” he adds.