RECORDED WEBINAR: “Challenges of Sourcing Critical Automotive Components in Mexico”
Webinar was recorded on June 29, 2022
China’s economic, political and regulatory conditions are motivating CEOs and COOs to take a strategic look at Mexico to diversify and simplify their supply chain. Transit time, shipping and labor costs, and an experienced workforce in the automotive industry are making Mexico an attractive sourcing and manufacturing venue.
Current state
- Clear trend to diversify Supply Chain from China to Mexico
• Affected by pricing, logistics, US/China tariffs, overdependence on China, long lead times - Real sourcing opportunities for success in Mexico
• Closer proximity to U.S. and North American customers
• Avoidance of US/China tariffs - Real challenges for establishing Mexican supply chain network
• MX vendors overwhelmed – not providing indicative pricing without company verification
• Need to establish relationship and difficult to do with no pre-existing relationships
• MX not replacement for China – size/scale of China
U.S. and Western manufacturers are considering multiple manufacturing and supply scenarios in Mexico. These strategies include:
- Sourcing components / finished goods with local content from Mexico, for consumption in the U.S.
- Sourcing components / finished goods with local content from Mexico and imported content from China, for consumption in the U.S.
- Setting up manufacturing in Mexico, utilizing local content from Mexico and imported components from China and elsewhere.
It’s a challenge to craft a supply chain strategy beyond China: one that’s tailored for your company and benefits your customers.
It requires (a) experience in identifying and qualifying automotive suppliers, (b) understanding how to import components and raw materials, and (c) knowing how to leverage the rules of USMCA and importing countries.
Current state
This recorded webinar on Challenges of Sourcing Critical Automotive Components from Mexican Suppliers” (Leveraging Mexican Automotive Suppliers & Reducing Dependence on Chinese Suppliers), provides information on seeking suppliers in Mexico, and the current state of each product category:
- Castings & Machined Parts
- Metal stampings & Fabrication
- Welded tubing like Exhaust Tubes, Seat Frames Tubes
- Injection molded & extruded plastics
- Interior parts like Headliners
- Headlamps & Taillights
- Electronics like PCB, Wiring Harness
Webinar Moderator:
- Alex Bryant, President & Founder, East West Associates
Webinar Speakers:
Gary Trzcianka, President, Scoject, Inc. – U.S.
• Product design, precision machining & international manufacturing company
• Averages 60 products annually from concept to production
• Automotive, aerospace, medical
Stefan Lachner, Senior Automotive Specialist, East West Associates – Mexico
• Former VP of Production & Logistics Planning for Robert Bosch in Mexico
• Former Manager of Operations and Engineering for Leoni AG in Mexico
• Former Business Unit Manager and Key Account Manager for Continental Teves Automotive in Mexico
Questions asked and answered in this recorded webinar include:
- Can you share your comments about sourcing in Mexico? What are the benefits & challenges?
- Lets look at the electronics suppliers in Mexico for the automotive industry. Can you talk about the electronics component suppliers in Mexico – their capabilities and capacities?
- Will there be growth in Mexico of a greater vertical supply chain base for PCBs in the next 3-5 years?
- Does the Mexican government realize the need to increase electronic supply chain and are they investing in this industry sector
- Discuss the large availability of supplier capabilities and capacity for injection molding, metal stamping and fabrication?
- What is the availability of steel in Mexico and imported stainless steel?
- What are the challenges of sourcing automotive components in Mexico, specifically as it relates to imported raw materials like resin, steel, electronics and plastics?
- What are the capabilities and capacities of the Mexican foundry business?
- With a lot of Mexican suppliers have the capabilities but not the capacity, how can companies work with suppliers on improvement projects?
- How to best identify & qualify Tier 2 and Tier 3 Mexican suppliers who have lower volume requirements, particularly in the automotive aftermarket?
- Imported Chinese tooling & Mexican tooling
- What is the availability for Mexican suppliers for interior products like headlamps?
- What are the capabilities and capacities of welding and fabrication suppliers in Mexico
- Discussion on the most common problems of sourcing in Mexico – capacity, development of relationships with Mexican suppliers, volumes needed and pricing
- What are your Intellectual Property concerns in Mexico vs. China?