Keeping Mexico on track
Risks to long-term investment and efficiency in the supply chain
If Mexico’s fast-growing automotive industry were to achieve the kind of output boost by 2020 that had been forecast prior to the US presidential election, its logistics infrastructure would be creaking under the strain.
With vehicle output expected to exceed 5m units by the end of the decade, more trucks and railcars were clearly going to be needed, alongside some substantial upgrades to the country’s roads, railways and ports.
That was before Donald Trump won the election. He will be inaugurated as US President on January 20, just 11 days before the Automotive Logistics Mexico conference opens in Mexico City, along with his promise to “terminate” NAFTA “if we don’t get the deal we want”.
His recent attacks on Ford and Toyota, leading to the cancellation of Ford’s plans to invest $1.6 billion in a new plant at San Luis Potosi, together with his threat to impose a 35% import tax on products made by companies which he said had moved jobs to Mexico, show just how much the landscape has changed.
There are potentially hugely disruptive challenges to cross-border shipments of both parts – in both directions – and vehicles.
So now the ‘Keeping Mexico on track’ theme for the conference has an additional dimension, as government, OEMs, tier suppliers and LSPs come together at the third annual edition of this vital, two-day event to explore the consequences of a possible dramatic shift in the terms of trade.
Vehicle production in Mexico has certainly been booming up to now, with numerous OEMs recently opening or planning new plants.
Despite the Ford cancellation, BMW is underway with its own new plant at San Luis Potosi, due to open in 2019. Elsewhere, Audi starts production of its Q5 at a new factory in San José Chiapa, Kia has started serial production at a site near Monterrey, and Toyota is currently setting up a new manufacturing site in the state of Guanajuato (not Baja as President-elect Trump had tweeted in his criticism).
Meanwhile, Mercedes-Benz and Nissan will be starting production of various models over the next two years at a new joint assembly plant in Aguascalientes.
And the NAFTA agreement has clearly been pivotal to such plans. “The NAFTA system overall is very effective,” noted John Martin, VP of purchasing, production and supply chain at Nissan North America, in an interview with Automotive Logistics in December 2015. “We get a lot of benefits moving vehicles and material by rail across the border.” Martin also emphasised how intricately the two countries’ supply chains were now linked.
Until the Trump election, the principal concern among OEMs had been ensuring that investment in Mexico’s infrastructure kept up with vehicle production. “We’re growing at a frantic pace and we need to see the right investments to match demand,” was how Ford Mexico president and chief executive officer, Gabriel López, put it recently. And despite the spotlight on Trump’s criticisms, those underlying challenges remain.
This year’s Automotive Logistics Mexico conference will again be held at the Marquis Reforma hotel in Mexico City, with a unique combination of networking and learning. A single, all-inclusive delegate fee includes:
- the pre-conference drinks reception on the evening before the opening
- access to all speaker presentations and Q&A sessions
- networking lunches and coffee breaks
- messaging, video and comment via the in-conference app
- the glittering Automotive Logistics Mexico gala dinner
- soft copies of speaker presentations to download after the event.
The event has proven highly effective for past delegates, providing “very valuable information for the industry”, as Raúl Gamboa, logistics planning vehicle project leader at BMW, put it after last year’s forum. “Good networking, insightful and relevant,” added Stuart McGillivray, manager, export planning and global projects at Toyota. “Definitely worth attending,” agreed Hugo Arzaluz, vehicle logistics specialist at Daimler. “A must-attend conference for auto logistics and auto industry professionals in Mexico,” observed Joseph Chapa, vice-president, western region at the US-Mexico Chamber of Commerce.
This year more than ever there is a need to register to join your peers, suppliers and competitors as they decide how best to position themselves for the fresh challenges now facing the Mexican automotive logistics sector.
This conference is part of the worldwide Automotive Logistics series, which includes Europe, China, Russia, the Global event held in Detroit, UK, South America and India. In addition, there are three US conferences dedicated to the supply chain and outbound logistics – The Supply Chain Conference, held in Atlanta GA, Finished Vehicle Logistics North America, held in Huntington Beach, CA, and the ports-oriented
Finished Vehicle Logistics Import-Export event in Baltimore, MD.