Automotive Spirit of Optimism With State Visit
Aguascalientes is situated in central Mexico, around 500 kilometers north-east of Mexico City. It is the country's fourth-smallest federal state, with just under 1.2 million inhabitants. Mexico has now edged ahead of Brazil in the competition to produce the most vehicles, putting it in pole position in Latin America!
In September 2015, Daimler and the Renault-Nissan Alliance laid the foundation stone for their new joint venture production plant COMPAS (Cooperation Manufacturing Plant Aguascalientes) in Aguascalientes in Central Mexico, which will be making premium compact cars of the next generation of the Mercedes-Benz and Infiniti brands in the future. The production of Infiniti vehicles will begin in the year 2017, followed by the SOP (start of production) of Mercedes-Benz vehicles in the year 2018. Together with the colleagues at the 50/50 joint venture COMPAS and the local procurement office in Mexico City, the Logistics, Procurement & Supplier Quality and Compact Cars Product Project Management functions are paving the way.
Dialog with a state visit
The creation of a new plant on a greenfield site requires partners in the supply industry. Suppliers who recognize and take advantage of the opportunity to grow profitably together. At the Supplier Day in Aguascalientes, management representatives of Daimler AG, COMPAS and the federal state marketed Aguascalientes as a location and highlighted the opportunities associated with working together.
Andreas Basche, Head of Module Logistics Planning (SC/IPM) and facilitator of the event, provided information on the Mercedes-Benz Supply Chain Strategy and the expansion of sourcing and localization activities. “Procurement logistics” said Basche “is an essential source of value for the future success of this location, together with the profitable localization of production materials. Success requires partnerships. In addition to the opportunities for growth, becoming part of Daimler AG’s supply chain and joining a successful network is an attractive prospect for everyone involved.”
Mexico stands out on account of the strength of its logistics and infrastructure. It can be used as a base to supply customers throughout the entire NAFTA zone. The supplier industry has experienced significant growth in recent years. About 120 of the current suppliers have already established local operations in Mexico. Eighty percent of the vehicles produced here are intended for export, and nine global OEMs already have a local production facility. The US plant of Mercedes-Benz in Tuscaloosa, Alabama will also be receiving more bought-in parts from Mexico in the future.
Carlos Lozano de la Torres, the Governor of Aguascalientes, got personally involved in the efforts to attract suppliers: “Aguascalientes is an admittedly small but powerful giant in Mexico – one of the most important locations in North America for the automotive industry. Our ambition is to continue growing our economy and place our success on a sustainable footing. The strong infrastructure and logistics, and the abundance of space in Aguascalientes make it an attractive location. We offer highly favorable conditions for suppliers to come and set up, and support for interested parties to make the most out of this potential.”
One team – one goal
Everyone involved in the project is working hand in hand at great speed. The target for production is laid out for 230,000 premium compact cars. Production for Nissan’s Infiniti brand is to start in 2017. The first compact Mercedes-Benz cars will roll off the line in 2018.
Interest in reinforcing business relationships still strong
Further visits from representatives of the government, the business development group and operators of the supplier park took place and are scheduled. The high ranking representatives use the visits to affirm their interest, and further reinforce the business relationship with Daimler AG and the supply chain in Mexico.
Impressions of the Supplier Day in Aguascalientes
Dr. Klaus Zehender
Executive Vice President, Procurement & Supplier Quality & Divisional Board Member Mercedes-Benz Cars (MP)
“We have set ourselves an ambitious target for local value added. Our goal is to achieve a localization rate in excess of 80 percent for future compact cars. However, we are not pursuing localization for its own sake. For each scope, we ask ourselves the question whether a localization would pay off under the aspects of tools, logistics, labor and factor costs.”
Head of Supply Chain Management (MO/SC)
“The expansion of the global supplier landscape is crucial to the implementation of the Mercedes-Benz 2020 growth strategy. High-growth regions offer significant opportunities, for example with the local acquisition of production material, the reduction of logistic costs as well as delivery times and inventory. One of our goals is to generate cost-related benefits throughout the entire value added chain.”
Head of Product Group Compact Cars (PG CC)
“The production site in Mexico is very attractive relating to our global footprint of our product group compact cars and offers great opportunities for the next generation of our compact cars. We want to tap these. To be able to roll off the first cars 2018 ‚Made in Mexico‘ the consequent implementation and establishment of all functions on site in Aguascalientes is fundamental. This includes the research and project steering functions. Decisive will be the role of Procurement and the steering of suppliers to realize the potentials we expect from this location in Mexico.”