Manuel Montoya
Automotive Cluster of Nuevo León (CLAUT)
View from the Top

Uniting Toward a Common Goal

Thu, 09/01/2016 - 17:21

Q: What opportunities are there that will allow the cluster to continue growing?

A: As KIA is beginning operations in Nuevo Leon our responsibility was to ensure a strong supply chain awaited its arrival. KIA has a 10-year plan to integrate Mexican suppliers into its permanent chain but the cluster intends to help accelerate this process, especially with Tier 2 companies. We see the greatest opportunities for new companies or existing suppliers in supplying plastic injection, machining and die stamping services. The cluster’s input will primarily involve connecting relevant industry players, helping them improve their manufacturing systems and ensuring they have all the necessary equipment to produce quality pieces.

Q: How have the Nuevo Leon cluster’s members acted to discourage OEMs from bringing raw material suppliers from their countries of origin?

A: Many foreign companies see the steel sector as deficient in Mexico. Until two years ago 100 percent of the steel involved in vehicle manufacturing was imported. Ternium began to fill that gap in the market with an investment of US$1.1 billion. This pushed the company to penetrate the import segment successfully. A lack of technology was another hurdle that Ternium solved by orchestrating a joint venture with Nippon Steel. Ternium is now supplying several assembly plants and has access to the entire market. The construction company Frisa has also invested heavily in providing a specific type of steel for metalwork tooling, which was a previously non-existent industry in Mexico. International players have since arrived from Canada, Spain and Portugal, while some Mexican companies have also started to enter the market.

Q: How has the cluster promoted technology development?

A: Since we founded the cluster nine years ago we have primarily acted toward the goal of evolving from a manufacturing hub to an engineering and design location. Mexican companies in the cluster have their own R&D centers and we also hope to attract the engineering divisions of all the non-Mexican players operating in Nuevo Leon. Navistar employed 100 engineers, who are working in the state’s Technological Innovation Park (PIIT) designing projects for the US.

We have also pushed to build a center for tests and simulations in Nuevo Leon. The Ministry of Economy supported us with a grant of MX$15 million (US$882,000). On top of the contribution from members of the cluster this grant has been spent on software licenses for the varied packages required by OEMs. A group of companies with a special interest made financial contributions to the project and we expect they will make extensive use of this facility.

Q: As the first in Mexico, how have you perceived the growth of the other automotive clusters?

A: Three years ago we began working with the Guanajuato cluster, which has already established an admirable number of companies and has committees in place that led to it being labeled the fastest growing cluster. CLAUT also supported the novice clusters in the State of Mexico and San Luis Potosi in 2015, which are in the first stages of consolidation. Our input to the network has been primarily administrative and management advice, as well as regulations through committees. There are operational dynamics that affect us all as an industry, motivating CLAUT to contribute to the country as a whole.

Q: What are your expectations for the industry and for new projects that will be launched in Nuevo Leon in 2016?

A: Any growth needs to be achieved through sustainable effort. The state government has been part of the cluster for the full nine years it has been operating and through two-way communication we ensure both the cluster and the government are aware of each other’s needs. The automotive industry is unlikely to see a record-breaking year for growth in 2016, as it is beginning to reach the point of saturation. There is a limit to the industry’s capacity to provide for the US market. The integration of engineering, design and R&D facilities by existing companies in the cluster would secure its sustainable growth. We are on the right track toward this target. The biggest opportunities are in supplying the new OEMs that are being established in the country and their Tier 2 suppliers. Our target is to unite the states of Mexico toward a common goal.