As the Mexican automotive industry advances inexorably toward its — and the federal government's — goal of an installed assembly capacity of 4 million light vehicles by 2017, opportunities for plastics processors are becoming bigger by the day, experts say.
“All the automakers are looking for suppliers in Mexico,” said Eduardo Solís Sánchez, executive president of the Mexico auto industry association Amia — Asociación Mexicana de la Industria Automotriz AC.
“They don't necessarily want to import components and parts,” Solís said at a late-September, two-day convention of Mexico's plastics industry association, Asociación Nacional de Industrias del Plástico AC, known as Anipac. He added that the best opportunities are for Tier 1 suppliers.
At the same event, held in Guanajuato, Rina Quijada, CEO of Houston-based IntelliChem Inc., a market intelligence provider for petrochemicals and plastics industries in Latin America, said the average content of plastics and compounds in light vehicles increased from a few pounds in 1960 to 375 pounds in 2010. By 2015 they will make up 10 percent, or 397 pounds, of a car's average weight of 3,970 pounds, she said.
Volkswagen AG's vice president of corporate relations and strategy in Mexico, Thomas Karig, who was not at the conference, told Plastics News in an email that “it's safe to say that polymer consumption for VW group production in North America (VW Puebla, Chattanooga and Audi) might increase by approximately 30 percent until 2018, compared to 2011.”
A major concern aired by some of the 70 or so delegates and speakers is the shortage of specialist machine operators and mold makers in Mexico.
“Our problem is a lack of qualified staff,” said Sergio Beutelspacher Sandoval, the prolific Mexican inventor of more than 1,000 individually designed extrusion and blow molding machines, several hundred of which have been exported across the Americas and to China.
His 35-year-old company, Beutelspacher SA de CV of Mexico City, which employs 100, has grown 10 percent this year and Beutelspacher wants the expansion to continue.
“But it's difficult because the whole culture of toolmaking and other trades is being lost,” he said.
Solís agreed: “We have a problem with [a shortage of] toolmakers.” Amia, he said, “is working with the suppliers association Ina [Industria Nacional de Autopartes AC] to try to rectify the situation.”
Francisco Antón Gabelich, managing director of government-run advanced technology center Ciateq (Centro de Tecnología Avanzada AC), said in an interview after the event that the organization does not offer mold-making courses at its half-a-dozen branches, either at the graduate or post-graduate level.
“This has to come from the technological colleges,” he said. However, multinational auto supplier Magna International Inc. of Aurora, Ontario, has a technical college in Puebla, Mexico, that trains would-be toolmakers, 20 of whom have been employed in Germany in recent years, he said.
During his hour-long presentation, Solís said Mexico's auto industry is the eighth largest in the world and the fourth-largest exporter of light vehicles. It assembled 2.55 million units in 2011 and is on course to produce 2.7 million this year. Of that amount, 2.3 million, or 85 percent, will be exported — 64 percent of them to the United States. The likely production total in 2013 is 3 million, he said.
Lorenza Martínez Trigueros, Mexico's deputy economy underminister, said in March that Mexico will probably have an installed light-vehicle assembly capacity of 4 million by 2017.
“We [the light-vehicle makers] accounted for 19.8 percent of Mexico's manufacturing gross national product in 2011 and generated $32.05 billion in foreign currency,” Solís added, pointing out that the sector “represents 4 percent of the [national] market for plastics.”
He said “more than 80 percent of the biggest auto industry suppliers in the world” have manufacturing operations in Mexico.
In June, Ina's president, Oscar Albín, told PN that supplies manufactured in Mexico for the global automotive industry, including those made of plastics, totaled $65 billion last year, 13 percent more than the production total in 2010.
According to Solís, Mexico is the United States' largest supplier of auto parts, shipping $35.8 billion worth out of a total of $113.8 billion in 2011, while Quijada said auto parts are key in the process of developing the Mexican automotive industry.
“In Mexico, the resins necessary to manufacture auto parts are in their infancy,” Quijada said. “There's a growth opportunity for both the [resin] suppliers and processors working together.”
Apart from its “privileged geographical location,” three-dozen free-trade agreements and the expertise of its workforce, Mexico has attracted investments from the largest vehicle makers and suppliers because it has economic and political stability, according to Solís.
“The announcements by carmakers of multibillion-dollar investments in Mexico in the past year were made while the country was in the middle of a pre-presidential election campaign, which speaks highly of our country,” Solís added.
Nissan, Ford, Volkswagen, Honda, Chrysler, General Motors and Toyota already assemble vehicles in Mexico and are expanding their facilities, while Mazda and Audi are building assembly plants.
Mercedes-Benz, a division of Daimler AG, BMW and Toyota will probably build assembly facilities in Mexico as well. According to a source mentioned in an article published by PN sister publication Automotive News in August, Mercedes-Benz and Toyota are considering an Aguascalientes location, while BMW prefers Querétaro.
Asked about reports in the Mexican media that Tata Motors, a division of India's Tata Group, also is looking at the possibility of building an assembly plant in the country, Solís said: “I've been hearing about this for almost two years. I know some Mexicans are really involved.”
Mumbai-based Tata owns the Jaguar and Land Rover brands, among others.
An example of expansion projects by vehicle makers already operating in Mexico came in March. Dirk Grosse-Loheide, Volkswagen's executive purchasing vice president for North America, said the German automaker could produce up to 615,000 vehicles in Puebla in 2012, which would be a 20.5 percent increase over the 510,000 units it assembled there in 2011.
Nissan also is preparing to build more than 1 million light vehicles a year in Mexico in the short term, the company said in January, the same month it announced plans to build its third assembly plant in the country.