New Product Porfolio to Reach Wider Client Base

Q: What are the most attractive factors about the Mexican aftermarket, and how has EXEDY taken advantage of them?

A: Mexico now has all the Japanese brands in the market and EXEDY has become the original equipment (OE) supplier for all those vehicles. In the past, our Mexican operations only supplied auto parts for Ford, GM, Chrysler, Nissan, and Volkswagen, but nowadays we have over 50 brands. We are starting to create brand recognition, but it has been difficult since EXEDY was only known by specialists. As the first stage in our current development strategy, we will focus on the Japanese market where we are more wellknown. Nevertheless, we will certainly look to develop relationships with German, Korean, and US companies too. Furthermore, we hope to see the same phenomenon in Mexico as we have seen in the US, where Japanese cars are the most popular vehicles in the market. Even so, we cannot limit our vision only to Japanese OEMs, which is why we are currently developing new Volkswagen, Audi, and SEAT components for the aftermarket. We launched 100 new products in 2015, but we still have to work on the right promotion within the aftermarket.

Q: What kind of advantages do EXEDY’s products offer to the market in comparison to its competition?

A: We are OE suppliers, so we can guarantee our distributors that the products we provide are high quality and trustworthy. Our quality is also applied in our aftermarket products, which offer something unique in the market. Additionally, since our products are in constant evolution in terms of technology and innovation, we review them annually to ensure proper functionality at all times. EXEDY specializes in clutches and components for automatic (AT) and manual transmissions (MT). Our Aguascalientes plant is currently manufacturing AT products, and we will shortly begin production of MT components exclusively for the OE market. Our market share is still small, but we only started operations for the aftermarket in April 2015. Therefore, we forecast that by 2023 we will own close to 40% market share. It will be challenging, but we have the necessary capacity and infrastructure with over 21 plants and 18 distribution centers worldwide.

Q: What has been your relationship with workshop and repair shop networks?

A: Mexico is a complicated market given that the distribution network has not undergone a significant positive change. A traditional distribution network includes manufacturers, distributors, wholesalers, repair shops, workshops, and the final consumers. However, that model is slowly changing, allowing distributors to commercialize directly through their multiple points of sale. As manufacturers, this process has affected EXEDY mainly because of the price variation. A distributor with multiple branches and a large purchasing capability generally requests special terms, switching between competitors depending on the best offers. On the contrary, we want to develop long-term relationships and cater to an extremely niche market due to the type of products we supply. Our distributors must be specialists in the field, as well as serious companies that want to create a strong communication channel. Furthermore, we want our distributors to provide us with firsthand information about the market’s trends and the product success.

Q: What strategies is EXEDY implementing to shift the market’s tendencies in such a dramatic way?

A: Our strongest strategy is the natural course the market is taking toward Japanese brands. Evidently, there is competition, but it is not easy for companies to develop new components with the specifications every vehicle requires. A project like that can take up to three years, while our product portfolio already has everything to fit the market. We know incentives are also an important factor, so we are including discounts, rebates, and reimbursements with our most regular clients.

Q: In light of the current exchange rate situation, companies like Mercedes-Benz have decided to change their prices to pesos. Does EXEDY have any plans to adopt a similar strategy?

A: We are just establishing operations, so we cannot take such drastic measures straight away. We will evaluate the situation in the future, but we must first thoroughly evaluate the market. EXEDY has its own strategies regarding fluctuating exchange rates, and right now incentives are a priority. Additionally, our rebate system is something that we believe will be beneficial for our clients, complementing our fair and competitive prices.