Taking Advantage of a Contracting Environment

New car sales in Mexico were forecast to drop 9 percent in 2019, according to AMDA, continuing a downturn that has hampered the automotive industry in recent years. The contracting landscape, however, is an opportunity for newer companies, if they are up to the challenge. “In a stable environment, it is business as usual for companies. But when the environment becomes complicated, opportunities emerge,” says Sergio Santibañez, Managing Partner and Commercial Director of DOSE Solutions.

DOSE’s Solutions is a Tier 2 company specialized in electrostatic painting. It has been in the market for over five years and has collaborated with Navistar, Caterpillar and Polaris. As a young company that grew during the industry’s peak, it is now taking advantage of a market that favors cost reduction and operational optimization. “Companies want to be more efficient and we can contribute to that. We have grown our business to three application lines, allowing us to provide a large-volume service,” Santibañez says.

For local and young players to maximize their chances and grow within the industry, they need to focus on the customer. “We have become more attractive to foreign companies due to our focus on customer service,” says Santibañez. “How a company adapts to the customer’s needs and how to assure operations remain flexible are key.” The industry’s rigid character often hinders value, which is why flexibility can make a difference. “Efficient operations lead to higher profits. Companies like DOSE can provide these kinds of solutions.”

How a company adapts to the customer’s needs and how to assure operations remain flexible are key.”

In a constricting environment, confidence is also vital, despite concerns the fact that it might be more difficult to attract customers, Santibañez says. “Entrepreneurs must believe in their strengths since many foreign companies actually give opportunities to local startups.” Training and creating expertise in different areas are also essential.

To develop internally and also gain a foot in the door with potential clients, it is essential to participate in clusters, which play an important role in strengthening local suppliers. Santibañez says clusters are “very supportive. They provide training and they open doors for local companies to get into big companies.” But the clusters can only open the door, they cannot guarantee entry. To that end, local suppliers need to improve their professionalization and recognize that a lack of flexibility among some suppliers could have a Domino effect. “Companies should be aware that by emphasizing cost, they might be overlooking value,” he says.

Industry 4.0 is a real-time scan of all your processes."

In a market looking to reduce costs while increasing efficiency, Industry 4.0 remains among the best options to make local companies viable. “Industry 4.0 is a real-time scan of all your processes. Companies are required to react quickly and in real-time with the information they have. Industry 4.0 is a useful tool to improve quality and maintenance,” Santibañez says.

Certainty is another element in the formula for success, and USMCA will help provide that. For medium-sized local companies, the treaty will create a positive short-term impact. “USMCA can be a boom for Mexican companies in the same way the original NAFTA was,” says Santibañez. “The government also should focus on taking advantage of the trade war between the US and China.”