TRAVERSE CITY, MICH. — The Canadian and American automotive supply base should view the growing Mexican automotive industry as an opportunity, said speakers at the Center for Automotive Research's Management Briefing Seminars in Traverse City.
And while automakers largely have an eye on the obvious savings from lower labor costs, for suppliers that is not the primary factor, said Bernard Swiecki of the Center for Automotive Research.
A survey of about 100 CAR attendees and affiliates, most with manufacturing operations in Mexico, and CAR's own research showed the top factor for suppliers locating in Mexico is because they're following a customer — an automaker sets up a plant in Mexico and wants its suppliers nearby.
“Quite often we hear, simply, that my customer told me to be there. That this product needs to be shipped locally, it's either fragile or there's some reason, and the automaker told the supplier that, ‘I need you there in Mexico,'” Sweicki said.
Shortages have emerged along the local supply chain — Mexico sources most of its resin from the United States and Europe and lacks access to some of the more sophisticated processes — creating opportunities for suppliers that can fill those needs. Particularly, Mexico lacks Tier 2 and 3 suppliers, including suppliers of injection molded parts.