The automotive industry is a fundamental engine of the Mexican economy, providing an estimated 35% of the country’s GDP and more than 3 million jobs. A high level of foreign investment and global exports position Mexico as one of the top 10 car producers in the world, but this position does not come without its fair share of challenges.
“From my point of view, things have changed a lot. We have lived challenging moments that made us reevaluate everything from our internal processes to the way we should approach clients,” said Miguel Barbeyto, President and General Director, Mazda Motor de México, during the International Mexican Automotive Industry Congress (CIIAM) 2021, an event organized by INA, in collaboration with Mexico Business.
The worldwide shortage of microchips or semiconductors necessary to manufacture vehicles has hindered automobile production in Mexico, the sixth-largest global passenger vehicle manufacturer in the world.
The changing Mexican market presents an opportunity for automotive manufacturers to adapt their strategies for the coming years as pointed out by Barbeyto, whose future plans for Mazda are based on an increased focus on people—employees and clients to be exact. Mazda’s ambitious goals have been set around what the company understands the market’s and general public’s demands and areas of interest might be.
“Consumers no longer perceive companies as entities for profit. Protecting health and the interests of society and the planet are among consumers’ new expectations. They want companies like Mazda to help remodel the world in a sustainable way, leading a change from an economy driven by volume to one based on the value that a responsible and environmentally conscious company can offer,” said Barbeyto.
Mazda’s route toward a “Sustainable Zoom-Zoom 2030” will aim to lower carbon emissions in vehicle manufacturing by 90 percent over the next nine years, from the extraction of raw material to the final disposing of the vehicle, as customers are no longer just aware of the final product. Mazda wishes to keep all types of customers in mind through hard-set company values such as empathy, collaboration, security and transparency.
Harald Gottsche, President and General Director, BMW Group Plant San Luis Potosi, Mexico, shares similar views for the future of BMW’s market. The San Luis Potosi plant, since its foundation in 2019, has created more than 32,000 jobs in the region and is in a perfect position to adapt to the changes consumers wish to see in automotive manufacturing because of the plant’s young age and regional resources. “BMW sees various opportunities in what many consider challenges presented to the Mexican automotive market,” said Gottsche at CIIAM. “For example, the decoupling of the US and China could present an opportunity for the Mexican market to step in and increase international trade, particularly due to USMCA and its sustainability and emissions demands.”
BMW’s five-year strategy plan for San Luis Potosi considers a cost-reduction goal of 25 percent per unit and a carbon dioxide emissions reduction of 40 percent. Furthermore, the plant aims to transition to an i-plant and become a CO2 emissions-neutral facility by 2024, which would be a first for the BMW network. “Electrification and carbon neutrality are the plant’s Top 2 challenges for the coming years, following a global trend of EV sales growth beyond predictions which will only continue thanks to US President Biden’s plans to further boost the electrification of the North American region,” said Gottsche.
BMW aims to produce the greenest electric car in the world and cut CO2 emissions by half over the next nine years. While 0.5 tons of C02 are emitted during vehicle production, BMW’s San Luis Potosi plant currently emits less than 0.2 tons. The plant is also aiming to take advantage of the region’s natural resources by replacing natural gas with biogas from a nearby landfill.
As green initiatives become more stringent, companies will need to continue adapting their strategies to comply with new standards. Already, BMW uses 100 percent green electricity. The company recognizes Mexico’s advantages as a region through its exports, skilled talent in manufacturing and also green energy availability. “We really need to go to CO2 neutrality and that includes not only the product but also the overall production of parts and our supply chain,” said Gottsche.