Celina Villarreal
Secretary of Economic Development
State of Nuevo Leon
View from the Top

Nuevo Leon Takes Its Automotive Ambition to the Next Level

Tue, 09/01/2015 - 17:42

Q: What were the main factors that enabled Nuevo Leon to attract KIA?

A: KIA’s decision was mainly determined by human capital because we were the only state that could guarantee a pool of well-educated technicians. Additionally, since the OEM is producing in Mexico and distributing to the US and Central America, Nuevo Leon was one of the best locations for KIA to establish operations. They settled in Pesqueria, an important municipality in the state, which allows easy access to the domestic market and US exports. Another advantage that Nuevo Leon offers is the possibility of importing natural gas from the US at a preferential price. The next step for Nuevo Leon is to deliver on its infrastructure promises, which will keep us busy until KIA starts production in May 2016. We have managed to bring everyone to the table, including the government, Gas Natural, and CFE. We also have all the necessary support from the private industry. In late 2014, we held the first seminar between Mexican and Korean Tier 1 and Tier 2 companies. It was an opportunity to attract foreign investment, but also to integrate local companies into the supply chain.

Q: Has it been difficult to coordinate a project with people from two different cultures?

A: We are not that different. Koreans are very firm and punctual with their commitments. We have managed to communicate correctly and everyone understands that the deadlines are not flexible. Additionally, KIA has international experience in Brazil, which has a similar culture to Mexico, making it very easy to work together.

Q: What is being done to ensure the availability of human capital labor, on paper and in practice?

A: For more than 150 years, education has been linked to private industry, with its most important companies having representatives on the boards of universities and technical schools. For several years, we have been making sure that students attend the best technical and professional classes, and clusters play a fundamental role in this process since they allow the triple helix of the academia, public, and private sectors to communicate. Universities in Nuevo Leon are producing 8,000 engineers a year. We anticipate that KIA and its in-house suppliers will generate 9,000 jobs, while the rest of the supply chain will create an estimated 22,000 indirect jobs. It is an important number that may lead to Nuevo Leon becoming the premier state in the creation of new jobs. Moreover, Nuevo Leon receives a lot of people from other states who are looking for career opportunities.

Q: What are you doing to help the Mexican SMEs make the most of this opportunity?

A: We are working with the Korean organization Kotra, and are receiving state funds to help companies strengthen their competitiveness. For 12 years now, we have had a unique program to develop suppliers and to identify SMEs that are ready for this process. Nuevo Leon is home to 200 companies that are active in the automotive industry, 50 of which are Tier 1 suppliers. There are plenty of companies in Mexico that would like to expand and come to our state, which is why the federal government has asked us to emulate the Bajio cluster’s model and from that exercise we concluded that we need to strengthen the supply chain by enabling companies to become more competitive.

Q: What is being done to encourage the transition of the industry from low-tech to high-tech engineering?

A: Nuevo Leon registers the most patents in the country, and the state and federal authorities have numerous incentives to establish more R&D centers. We have an ambitious project with the automotive cluster and with Katcon, which already has presence in the Research and Technological Innovation Park (PIIT) R&D Center. The automotive cluster has created the first master’s program in automotive design in Mexico, in coordination with ITESM, UDEM, and the University of Nuevo Leon. There has been engineering development activity in the state for many years, but with this new PIIT project I see new companies getting on board.

Q: What new opportunities have you detected to bring Korean companies from other sectors to Nuevo Leon?

A: We have had an impressive response in the months following the announcement of KIA’s arrival. We have received 48 companies from all industries, especially within the energy sector, which are looking for business opportunities in Mexico. We expect to announce the arrival of approximately 13 Korean companies.