USMCA to Bring Big Opportunities for MexicoBy Alejandro Enríquez | Tue, 10/05/2021 - 09:00
Q: What is SKF’s mission in the automotive industry?
A: The company’s main focus is on engineering and industrial knowledge. SKF is always working to innovate and all of our engineering departments are creating new automotive solutions. The present-day bearings used across the world were originally developed by SKF.
SKF has always offered better-than-expected products for friction reduction, lightweighting and improving efficiency. For instance, we have always been partners with Ferrari in Formula 1, which can be considered our 300km/h laboratory. SKF develops robust solutions tailored to the specific needs of every client.
Q: How is SKF facing the electrification and autonomous driving trends?
A: Electrification is a megatrend and SKF is right in the middle of it. We provide every wheel and transmission bearing for Tesla vehicles. Production for EVs is different than for internal combustion vehicles. For EVs, we produce friction-reducing bearings with greater capacity for electric charges. Autonomous driving is another big trend that is changing the market and requires different components.
In Mexico, SKF uses cutting-edge technology in its manufacturing and we see significant opportunities in the traditional powertrain market. However, the EV market in Mexico is not robust enough. While there are opportunities for engineering, Mexico still has a long way to go in EVs.
Q: How does big data help SKF improve its products?
A: SKF is a global leader in interpreting information and using it to adjust processes. We collect data to generate precise analyses. We do not have an integral vision. We focus on what we do best: reducing friction in rotating equipment. Our engineering backup helps us offer a robust product, which will not always be the least expensive option but will be a robust solution.
This sensorization of the powertrain, mostly in heavy vehicles, is one of the biggest trends in the sector. Live monitoring, data collection and diagnoses are key to continue offering the most robust product possible. SKF is now testing remote monitoring in the US. We have a contract with an important logistics brand to monitor the operational conditions of the bearings using sensors. The bearings are completely dynamic and their sound, vibration and temperature inform operators of any problems with the bearing. This allows them to program maintenance services.
Q: How has SKF grown its business in the country?
A: In 2006, Mexico’s automotive industry represented US$3 million in business for SKF. Now, it is a US$120 million business. We originally started working with Volkswagen de México, American Axle, Ford, Nissan and General Motors. About 60 percent of the bearings manufactured in Mexico are for General Motors and roughly 75 percent of our production is exported. Our plant focused in Puebla focuses on bearings and the facility in Guadalajara focuses on seals for powertrains and transmissions. We recently acquired two more plants in Monterrey to produce bearings for other industries and one of those plants will later produce bearings for heavy vehicles.
Q: How has the USMCA’s steel and content origin rules affected the industry?
A: USMCA’s requirements have changed the automotive industry. The treaty is clear on steel and bearings but not on seals, which have become a difficult topic for international trade that affects our exports. The US and Mexico have not even agreed on the tariff fractions for international trade.
SKF’s footprint has helped it to continue expanding its businesses. We will supply Audi with bearings made in Puebla. Before the USMCA, Audi imported them from Canada. With the exception of the vehicles sold in China, the global production of the Q5 is in Puebla. Audi focused less on the price and was flexible to meet the regional content requirements.
Q: What does the future of the raw materials industry in Mexico look like?
A: Mexico has a great deal of work to do in the raw materials industry. We are not taking enough advantage of the great opportunities that are present in the country. The future is bright for the industry, so the country cannot become a protectionist economy. The industry needs international agreements and fair competition. Large Asian competitors have started to open factories in Mexico because they want to participate in the USMCA market. This is good for the sector because we can all compete under similar circumstances, while companies that were already present in Mexico will have the advantage of experience.
SKF de México is part of SKF Group, a leading global technology provider since 1907. SKF has over 1,000 employees in three facilities in Guadalajara, Zapopan and Puebla and produces bearings and seals for the original and aftersales markets.