Opportunities Abound in EVs and ICE Vehicles: Stant

Q: Stant was one of the first automotive companies to settle in San Miguel de Allende. How has the landscape changed since your arrival?

A: Stant was among the pioneer automotive companies in San Miguel de Allende and today there are more than 16 companies in the industrial complex. We have doubled our plant size and in the next six years we will have likely doubled our size again and launched more products.  Our bet on San Miguel de Allende was part of a strategic decision to be close to our customers and to be part of Guanajuato’s automotive hub to strengthen our position in the Bajio.

During the past year, the sector faced several global challenges, including semiconductor shortages and the pandemic. Thus, we need to innovate every day in our processes and products.

Q: Stant recently announced project expansions amid the pandemic. How have these projects advanced?

A: The expansions are part of our growth strategy. Our plant here is fully operational and to date, we have transferred 65 percent of our operations from the US to Mexico. We expect to complete the transition in August. We are investing considerably in this plant to bring new production lines that will support the local supply chain and maintain optimal production levels. That is our top priority.

Q: Which opportunity areas has Stant found among its suppliers? What have been some successful supplier development strategies?

A: We are always looking for strategic suppliers for plastic injection, metal stamping, fasteners and other metal components with special alloys, among other products. Our purchasing team is constantly looking for strategic partners able to supply us locally. We participate in supplier development and help our current suppliers grow their business.

Q: What are some of the elements Stant looks for to help suppliers scale their business?

A: We look for companies that have already incorporated some automotive standards such as the IATF:16949 or at least ISO certifications. We then perform a wall-to-wall audit of their quality processes and other areas that add value to their work, while reviewing if they follow adequate controls to ensure the quality of the end product. We have helped suppliers with potential to scale up their businesses, get certifications and bring their products to other tier companies. We are actively looking for potential suppliers.

Q: OEMs are introducing more aggressive electrification plans. How is Stand adapting to this trend?

A: There are stages for electrification and there is a long way to go before reaching 100 percent electrification. In terms of price, there is still a considerable gap between traditional ICE vehicles and electric vehicles (EV) that needs to be filled. OEMs are focusing on lowering prices but they are also working to improve ICE vehicle performance and developing hybrid vehicles. We will see lighter vehicle materials and components, for instance aluminum engines. Some of the components we provide for combustion engines, such as canisters, increase engine efficiency.

Given Stant’s expertise, thermal management and temperature control will be a priority for supporting battery systems. We are focusing in that area and in other critical components for electrified vehicles. Eventually we will shift toward supplying electric vehicle manufacturing but there are important steps that will take place first, such as a reduction in EV prices. As prices become more competitive, these vehicles will become more attractive to the consumer and as the market becomes more electrified, gasoline prices will fall. But ICE models will continue to be on the roads for many years.

Q: How does Stant innovate in engine components to increase vehicle efficiency?

A: We work with better technologies and materials and on innovative systems that make the vehicle lighter. The lighter the vehicle, the better the performance. OEMs are looking for ways to increase vehicle performance per gallon to offer a better product with existing technology. Changing a platform abruptly can be costly for everyone. Electrification of manufacturing lines will eventually arrive but it will not be as disruptive as we may think. When we reach a balance between EV and ICE vehicle prices, things will start to change more rapidly.

Q: What are the challenges and opportunities for Stant in the Mexican market?

A: There is a great opportunity for us to grow in the combustion engine segment as we support gasoline, diesel, construction vehicles, power generators and off-road vehicles. We support all of these segments in the country and opportunities are there for us to take. We have incoming projects with large players in some of these segments and we will continue to grow our platform within the next 10 years. Even though there are technology disruptions, there are also fresh opportunities in the existing technologies, particularly for vehicular temperature-control systems.

Stant is a US-based automotive supplier of parts for cooling systems, fuel vapor management, delivery systems, molded and tubular assemblies and caps. The company supplies original equipment for automakers, spare parts and industrial equipment.