Like a snowball rolling down a mountain, when the industry’s biggest players show their faith in a country, the growth that follows is inevitable. As investments continue to flood into Mexico, international automotive OEMs are paving the way for their most trusted suppliers to follow their lead. The Japanese Tier 1 supplier, NHK Springs, has answered that call by establishing a new manufacturing plant in Irapuato in 2014.
Situated on the Castro del Rio industrial park, NHK’s new plant has been constructed to focus on the manufacture and sale of coil springs and stabilizer bars for OEMs throughout the country. Production at the plant began in December 2014, with the objective of producing two million springs and at least one million stabilizer bars annually. According to Kosuke Takeo, CEO of NHK Springs Mexico, Castro del Rio’s conditions are exceptional in terms of location and water availability. “We concluded that Irapuato was the best choice as it would allow easier access to more OEMs.” Before the decision, NHK had been studying the possibility of coming to Mexico for a while, but did not have the clients or the supply contracts that would justify investing in a new plant. “Formally acquiring Mazda as our client in Mexico acted as the catalyst that allowed us to ignite our operations here, but now we must find other clients if we are to get any Return on Investment (ROI) on the plant.”
While Mazda was NHK’s first and primary customer in Mexico, the company was soon approached by Nissan to become a supplier, and also aims to secure the business of Honda, Toyota, and Ford. “Previously, our sister company in the US was selling components to Ford’s plant in Hermosillo, but now we can supply these components locally,” states Takeo. The Irapuato plant is almost entirely automated, with manual labor only comprising a small percentage of the operations. However, NHK’s stabilizer bar production line in Mexico is still less automated than in Japan, so training has been a key focus during the plant’s establishment.
NHK has applied a new concept to its production line in Irapuato. While it still uses thermal treatment and industrial ovens, it is much shorter than the traditional production line. The company’s spring production line in Mexico only measures 76m in length and 10m in width. Comparatively, in Japan, the traditional line measures around 120m in length and 13m in width. Industrial ovens in particular are usually very large, resulting in some production lines reaching more than 100m in length as a result. Such long production lines inevitably hinder expansion, so NHK’s approach is designed to address the low market demand that it faces. “Since we do not have that much business in Mexico, the company has focused on innovations in the production system,” says Takeo. “Previously, we could only open a new plant if half of its production was pre-assigned, but under our new philosophy, we can offer exactly the same product with more efficient production processes.”
NHK sees a real opportunity in the design of lighter products, which is an area that its competitors are also tackling. “Throughout the company’s history, we have used harder, more resistant, and lighter materials,” recalls Takeo. “We use a surface treatment to prevent the metal from breaking, utilizing a combination of different steel alloys and thermal treatments to achieve this. However, we have not moved to use another metal base; we are still in the era of steel.” NHK’s focus on applied and fundamental R&D combined with its innovative production techniques are aligning the supplier with some of the industry’s most coveted requirements, outlining a recipe for continued success for the brand.