As Operations in the Bajio Rev Up, US Suppliers Take NoteBy MBN Staff | Tue, 01/01/2019 - 16:41
Q: What prompted Stant to move from Tijuana to San Miguel de Allende?
A: We wanted to centralize the company’s operations in Mexico. Being in Tijuana kept us from capitalizing on potential opportunities due to logistics complexities. The industrial corridor stretching from Guanajuato to Guadalajara includes many of Stant’s Tier 1 clients, including Martinrea, GM, Ford, and other new potential customers like Nissan, VW and BMW. The company understood that the Bajio region is the new Detroit and we wanted to be close to it.
Since arriving to San Miguel de Allende, we have worked to substitute imports with locally procured components. We think there is great potential in Mexico’s supplier base. For instance, we used to import aluminum castings from China but our costs increased 22 percent when the US government started levying tariffs on Chinese steel and aluminum, not to mention the added costs related to logistics. Now that we are sourcing some castings in Mexico, we have effectively reduced both of these extra expenses.
Q: As a transnational company with significant presence around the world, what role does Stant’s San Miguel de Allende plant play in the company’s global operations?
A: Stant was the first automotive company to land in San Miguel de Allende. We chose this location looking to serve the local automotive hub and now we work with companies like Ford and FCA. The company is about to launch a product offering that covers the needs of OEMs in San Luis Potosi and Puebla and we also expect to export components to GM in Brazil. Although we will operate as a direct supplier for the latter, we usually are a Tier 2 that produces components for fuel delivery and other systems. At this plant we focus on component manufacturing but we hope to have product development centers in Mexico in the future.
Q: How are Stant’s operations divided between production of original equipment and spare parts for the aftermarket?
A: About 75 percent of our production is original equipment that goes to OEM assembly lines. The remaining 25 percent is divided between the automotive aftermarket, representing 15 percent of our production, and industrial equipment that accounts for the rest. Thermostats alone account for 50 percent of Stant’s production. The company has consolidated a significant share of the automotive thermostat market thanks to its patents and technology development efforts.
Our capacity to design and manufacture any component in a vehicle’s fuel delivery system is a key competitive advantage. Stant can supply anything from a radiator cap to the car’s fuel filtering system and the Onboard Refueling Vapor Recovery (ORVR) system. Competitors in our segment tend to outsource component production and often lose control of the overall design process. By relying on our own patents and keeping tight control of the front-to-end design, we can develop original solutions while remaining flexible enough to make adjustments.
Aside from GM, FCA and Ford, Asian automakers, such as Tata Motors, Mazda, Hyundai, Isuzu, Honda and Subaru, as well as European OEMs like Jaguar Land Rover, Aston Martin and SAAB, are part of Stant’s client portfolio for original equipment globally. On the aftermarket side, we supply clients like Amazon, Gates, ACDelco, NAPA and Walmart with spare parts, such as one-size-fits-all radiator and fuel tank caps and thermostats.
Q: How is Stant preparing for an electrified future?
A: Stant works in collaboration with its client OEMs to improve its fuel-filtering and ORVR systems with the goal of optimizing fuel consumption. Although we recognize the importance of electric vehicles as a trend of the future, we are also aware that combustion engine vehicles will remain in the market for a long while. This is due in part to battery-performance issues, the environmental impact of producing batteries and their costs. Compared to an EV, a fuel-powered car remains highly cost-competitive, which translates to increased production volumes of combustion-engine vehicles.
Stant is a US-based automotive supplier of parts for cooling systems, fuel vapor management and delivery systems, molded and tubular assemblies and caps. The company supplies original equipment for automakers, spare parts and industrial equipment