José Carlos Guzmán
CEO
Birlos ATSA
/
View from the Top

Strategic Partnerships Help Make a Market Leader

By Alejandro Enríquez | Thu, 11/12/2020 - 06:00

Q: How has Birlos ATSA maintained its leadership position for 60 years?

A: Birlos ATSA will celebrate 60 years in 2021 as a third-generation family company. We participate in the original equipment and aftermarket segments for wheel studs and fasteners. Two elements have been key for Birlos ATSA throughout its history. First, we have a comprehensive manufacturing approach: we closely oversee our supply chain and integrate all the processes required to manufacture a fastener, thus giving us a greater competitive advantage.

The second element is our problem-solving mindset. This has been passed down for three generations. We are aware that market leaders in screw manufacturing worldwide are Taiwanese but they break down the process into different elements so that different factories or companies focus on a specific part, such as finishing or special treatment. With our comprehensive manufacturing approach, we are flexible enough to develop a new product in a really short period, sometimes even a day. Meanwhile, in Taiwan that can take between three and four months for a minimum order of 1 million pieces. We have taken advantage of that window of opportunity for customers that require fewer than 1 million pieces and we provide custom-made solutions for them. For instance, if a customer requires 600,000 pieces a year, we do monthly deliveries or even weekly deliveries, which also helps them with their cash flow and stock management and allows them to adapt better to demand fluctuations.

Birlos ATSA has a clear vision about the role it wants to play in the market. Our mission is to eliminate any risk of an incident due to a fastener or a wheel stud failure. We mitigate the risks related to public transportation. Thanks to this vision, Birlos ATSA enjoys a respected reputation in both original equipment and the aftermarket segments in Mexico, the US, and Canada. This has not always been the case. Decisions were made to abandon other product lines in favor of our studs. There was a moment when we realized that 90 percent of our problems came from 5 percent of our products, which were not intended for vehicle wheels. From that moment and for 20 years now, we have solely manufactured wheel studs. That specialization has allowed us to solve our customers’ problems faster.

Q: How has Birlos ATSA remained competitive against potential options from Asian suppliers?

A: There are really only a few fastener manufacturers in the country. The top producers used to be in Japan, the US, or Germany due to the technological development needed in their machinery. What Taiwanese companies did was to develop their own machines at a fifth of the original cost, which enabled them to manufacture five pieces while other companies buying Japanese, US, or German equipment manufactured just one. This led many US manufacturers to shut down their operations. Others, like Birlos ATSA, have taken the opportunity to buy those machines at a fraction of the cost. But let’s be clear, Taiwanese and South Korean companies are not more competitive because they are cheap, it is because of the technology they have developed.

With this in mind, we have built strategic partnerships with eight companies in China and Taiwan with equipment totaling around 500 forging machines. We are not importing our products from them. Rather, for the products that are not convenient for us to manufacture here, we forward that order to our partners in Asia for the first part of the processes and we finish everything here. Our wheel studs are 100 percent manufactured in Mexico but part of the nut is made there. Those partnerships have lasted for more than 10 years. We audit the companies, supervise them, and oversee the quality of their supply chain.

Q: How will USMCA’s steel requirements influence your sector?

A: With USMCA, steel producers have decided to expand their local footprint in Mexico. Yet, the industry has not grown considerably. There are new suppliers in the country and they are targeting the Mexican market with specific processes but not milling per se. This is a good first step. The ideal scenario would be to have more screw manufacturers in the country. Industry trends are also leaning this way, but slowly. Joint ventures could be seen in the foreseeable future to manufacture everything that is not a wheel stud. The dynamism of the US market will continue to lead industry demand.

Q: How has Birlos ATSA endured the effects of the pandemic?

A: Birlos ATSA is expecting a healthy 2020 due to our efforts prior to the pandemic. Our recovery forecasts are based on our current business partners and our participation in the original equipment sector, which properly restarted in August. Naturally, we are not expecting to regain the volumes lost during the most critical months of the pandemic but we will finish 2020 with healthy numbers. We are also working with customers that have been loyal to us. We continue to innovate and our strategy is simple: maintaining our AAA customers and offering our same products to new customers.

When the new-vehicle market goes up, the aftermarket goes down and vice versa. We are aware that people are preferring to repair their vehicles and given our expertise in the aftermarket we see a great opportunity that will help us recover faster. We have 1,000 SKUs for the aftermarket regardless of the age of the model, whether it is an old 1950 Ford or a recently launched vehicle.

 

Birlos ATSA is a 60-year-old family-owned Mexican company that specializes in wheel studs, particularly fasteners for the automotive sector. The company is a market leader in Mexico with AAA customers like Rassini and Meritor

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst

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