Supplier’s Bet on Local Talent Pays off

Q: How does Brose’s new plant in Queretaro complement the company’s local operations?

A: Each of Brose’s plants specializes in a different business unit. The El Marques plant focuses on electric motors for steering, transmission, HVAC and ABS braking systems, while other plants produce locks, window and door modules. The new plant will produce seat components, which will mean all of Brose’s divisions will be present in Mexico. There are Brose components in 85 percent of all vehicles assembled globally, so a new Brose plant means more Mexico-made parts are integrated into more vehicles.

Q: What is Brose’s strategy to stand out in the car seat components segment?

A: This is a highly competitive segment. Our goal is to differentiate from competitors by developing new advantages for seats and developing new services that did not previously exist in the automotive market. Brose has taken all the adjustable features that are usually reserved for front seats and adapted them to rear seats, which gives passengers the option to adapt their seats for more leg room. The company is constantly monitoring the market to understand its needs and what is the best strategy to address these. Brose may not be an overly renowned brand among car buyers but all OEMs around the world purchase Brose components and 85 percent of all cars built every year come with one or more of our products. 

Q: What are the most important milestones that Brose has reached toward increasing its local supplier base?

A: Brose’s El Marques plant has its own local purchasing director, which means it can easily bring in Mexican suppliers and help them develop their capacities. Many of Brose’s suppliers abroad, particularly Chinese companies, are interested in landing their operations in Mexico and we are helping them through assessment.

Q: What opportunities does the arrival of new OEMs to the Bajio region bring for Brose?

A: BMW is one of Brose’s most important customers, so being able to supply the company locally is a great opportunity for us. Brose’s El Marques plant is already producing components for BMW’s local operations. We are also planning to enter Toyota’s supply chain just as we did with Mazda before. This may prove a challenge as Asian OEMs tend to stick with Asian suppliers. To overcome this obstacle, Brose bets on delivering cutting-edge technology. Innovation and new developments, coupled with an Industry 4.0 focus, have helped Brose remain at the technological forefront. 

Q: How has the vehicle electrification trend impacted Brose’s product development strategy?
A: Brose is already developing new products for next-generation vehicles. We are aware that we need to be present in these new supply chains, which means making significant investments globally. Brose is already supplying components to Tesla, as well as to another EV OEM based in China. Mexico is bound to play a key role in the production of components for the car of the future inasmuch as the country continues to advance its capacities in this sector. To that end, Brose helps its partner universities to design their academic plans to focus on the key needs of the future automotive industry. 

Q: What are the key results that Brose has obtained from collaborating with local universities?

A: We have established agreements with 13 of the 70 universities present in Queretaro, which helps us train people and develop new technologies. Brose has created an R&D center within the Polytechnical University of Queretaro to develop joint innovation and automation projects, some of which will be exported to other Brose plants abroad. We are also training Mexican, US and German students at the El Marqués plant to help them become future professionals.

Q: How might USMCA’s new trade environment impact Mexico as a destination for automotive investments?

A: Mexico remains a highly attractive investment destination for automotive companies from all over the world. As part of their cost-reduction strategies, several European companies are shifting operations from Europe to the US to Mexico. Brose expects neither a particularly negative impact nor a benefit from the new rules of origin in USMCA. Tariffs on steel and aluminum affected us the most, but those were eliminated.