Puebla Autopart Suppliers Pursue Tier 1 Upgrade

In Puebla, Mexico, a cohort of 15 Tier 2 (T2) companies is actively pursuing certifications to elevate their status to Tier 1 (T1) within the current year. This initiative responds to the burgeoning opportunities emerging in nearshoring within the automotive industry and supply chain.

Mirko Kosic, President, Automotive and Auto Parts Sector at the National Chamber of the Manufacturing Industry (CANACINTRA), commended the collaborative efforts led by the Automotive Cluster of the Central Zone (CLAUZ) in Puebla and Tlaxcala. Together, they identified these Tier 2 suppliers and are providing support for their transition into direct manufacturers or Tier 1 suppliers.

To qualify for elevation, companies must obtain the TS 16949 certification based on ISO 9001 standards, focusing on aspects such as product quality, productivity, competitiveness, and continuous improvement. Additionally, autopart manufacturers are expected to reinvest in their facilities to enhance production capacity, potentially expanding their workforce by up to 30%.

Mirko Kosic emphasized the importance of thorough evaluation for these companies, despite meeting many Tier 1 prerequisites, stressing the need for strict compliance with automotive industry standards.

"For a Tier 1 company in Puebla serving clients like Volkswagen, Audi, or other brands, maintaining product quality is paramount. While component losses may occur, they must be minimized to avoid impacting operational costs”, Kosic emphasized.

Currently, Puebla's supplier sector, associated with CANACINTRA, comprises 120 firms, of which 45 hold Tier 1 status, collectively employing over 65,000 individuals.

Kosic envisions promising prospects for Puebla's automotive supply sector, particularly with the influx of nearshoring companies seeking local partnerships. He urged Tier 1 entities to prepare for potential collaborations and contracts with these newcomers, necessitating readiness in technical capacity, labor force, and financial resources.

While addressing recent developments, Kosic underscored the imperative need for continual workforce enhancement within the autoparts industry. "The Tier 1 and 2 suppliers are placing greater emphasis on the training of their personnel, with Tier 1 entities investing more significantly as they operate within the primary tier of automotive manufacturing supply chains."

Kosic emphasized the need for higher wages to attract and retain skilled labor, as well as ongoing investments in employee training and specialization. Over the past four years, there has been a noticeable decrease in workforce turnover, from four individuals migrating between companies to just two, reflecting the sector's stability and growing specialization.

Puebla's autoparts sector is witnessing a transformation as approximately 40% of its workforce transitions from general labor to technical roles, driven by investments in automation and specialized training programs.