Operational Efficiency, Digitalization Key to Grow in Mexico

Q: How has Toyotetsu's business model in Mexico evolved as OEMs demand greater localization, shorter delivery times, and more engineering support? 

A: As a Tier 1 supplier for Toyota, our priority focus has been the strict implementation of the Toyota Production System (TPS), working with frameworks like the Kanban system and fully aligning with their operational philosophy. Additionally, as manufacturers of metal parts, we have developed our own proprietary technology. I spent 10 years at Toyota plants in Japan collaborating directly on joint vehicle development, which allows us to bring that firsthand technical expertise into our operations.

Our goal is to be the number one plant within the Toyota Group, driven by a single keyword: evolution. The global landscape is changing drastically, and our priority is to maintain our ability to adapt to overcome every challenge.

Q: Given that vehicle safety directly depends on the integrity of the chassis and body, how does Toyotetsu's engineering precision impact final vehicle safety? 

A: We strictly align with Toyota's safety standards and targets, as well as country-specific regulations. From the early stages of development and engineering, we apply computer simulations to predict how each metal structure will behave during an impact. We design and manufacture every component considering its structural performance from development all the way through to final production.

Q: What is the distinctive engineering hallmark that only Toyotetsu can deliver? 

A: A key example is the manufacturing of the center pillar, the structural column located between the doors. In head-on or rear-end collisions, there are programmed deformation zones (crush zones); however, in a side impact, this column must remain rigid to protect the cabin. The harder the metal, the greater the protection, but it also becomes exponentially more difficult to shape. Our competitive advantage lies in an exceptionally high technical capacity for developing dies capable of forming ultra-high-strength steels.

Q: What has been the main challenge in adapting your processes to the use of high-strength steels and aluminum, and what opportunities do you see in developing battery structures? 

A: While conventional hardness metal is processed using standard presses, for high-strength steels we utilize hot stamping technology. Likewise, we possess the technical capability and expertise to process aluminum components.

The core challenge is the continuous development of forming technology. To address this, we are proactively collaborating with leading steel and raw metal material manufacturers, working closely with Japan's top three steelmakers, to develop and validate more robust and stable manufacturing processes.

Q: How has the shift in EV adoption priorities modified your investment and planning strategies? 

A: Our investment plans in electric mobility remain fully on course. To thoroughly understand different architectures, our headquarters in Japan have acquired and tear downed vehicles from other brands, analyzing their structures and simulating how we would manufacture those parts. Furthermore, we are collaborating with Toyota's design department to jointly drive these types of structural solutions forward.

Q: Given the USMCA Regional Value Content requirements, how do you ensure the local integration of raw materials and inputs within the value chain in Mexico? 

A: Toyota maintains a centralized and integrated materials purchasing process. This strategy of supply chain standardization and integration is applied uniformly across Mexico, the United States, and Canada.

We have a specialized in-house foreign trade department managing our operations and direct purchases. Our strategy focuses on developing and consolidating a Tier 2 supplier base located locally within Mexico.

Q: How are you leveraging nearshoring opportunities to expand your operations in Mexico? 

A: As we reach a decade in the country, we project our growth with a forward-looking perspective. Beyond consolidating our production for Toyota, we are actively exploring commercial opportunities with other OEMs in the market. The automotive industry based in Mexico possesses world-class competitiveness.

The Mexican operation contributes significantly to the group's consolidated results, driven primarily by the manufacturing of components for the Toyota Tacoma, one of the top-selling vehicles in the North American market.

Q: Given the progressive integration of robotic welding cells and automation, how do you foresee the evolution of talent profiles in the Bajío region? 

A: We anticipate an increased demand for engineers specializing in IT and Operational Technology (OT). Upskilling and developing this talent locally is crucial, as there is a shortage of specialists in the market who have the skills to manage and implement these advanced technologies.

Q: What are Toyotetsu’s priorities for the next 12 to 36 months?

A: We are working on three priority fronts coordinated with our North American headquarters. The first is competitiveness and capacity, as we aim to raise productivity and quality levels to solidify production volume allocation in Mexico and expand installed capacity. The second is operational efficiency, as we are implementing partial automation and redesigning plant layouts in response to labor reforms such as working-hour reductions. Finally, we are focusing on digital transformation, accelerating the digitalization of manufacturing and control processes.

The primary objective is to maintain operational flexibility. While we align with Toyota's production volumes, we are also establishing contact with other manufacturers to diversify our client portfolio. Should an increase in demand arise, we are contemplating plant expansion.

Q: What advice would you give to other foreign executives taking on leadership roles in Mexico? 

A: Workers in Mexico demonstrate serious commitment, great openness to feedback, and a strong willingness to work as a team. Mexico holds enormous potential. To executives taking on management roles in the country, I would advise building an organizational culture that leverages the warmth, energy, and enthusiasm characteristic of Mexican talent.

Toyoda Iron Works (Toyotetsu) is a global Tier-1 automotive supplier specializing in high-strength body structural parts, chassis components, and functional safety assemblies. Utilizing advanced stamping, welding, and resin molding technologies, Toyotetsu serves as a critical strategic partner to Toyota and leading OEMs, driving vehicle safety, lightweighting, and structural integrity across international supply chains.