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Economía y Finanzas MEXICO AUTOMOTIVE SUMMIT 2018, September 12Th, 2018
MEXICO AUTOMOTIVE SUMMIT 2018, September 12 Th, 2018
Por:  GMORivera
 

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The Week in Automotive: Agreement on the Horizon

After almost a year of negotiations, negotiators say this time they might actually reach an agreement. After bilateral talks, Mexico and the US begin to clear the path for a successful renewal of NAFTA. Although key issues still need to be resolved with Canada, parties agree that a treaty could be finalized by the end of August.
This, however, does not lift all the weight from Mexico. Potential tariffs and ongoing domestic contraction remain key hurdles for the country to keep growing its automotive industry.
Ready for more? Buckle up!

MEXICO AND THE US START SEEING EYE TO EYE
Mexico and the US are said to be close to an agreement regarding automotive rules of origin and the sunset clause for the new NAFTA. There is willingness to finalize the treaty in August, says Juan Pablo Castañón, President of the Corporate Coordination Council.
Minister of Economy Ildefonso Guajardo traveled again to the US to continue NAFTA talks. Negotiators say 19 of the 30 chapters in the treaty could be close to completion.
This is the first negotiation since the beginning of the revision of the agreement on Aug. 16, 2017 where Canada is not present. Still, the agreement is expected to remain trilateral and negotiations with Canada are expected to resume this week.
Mexico opens position toward regional content based on salaries in software and highly sophisticated components to avoid a general standardization of salaries in North America, says Guajardo. Still, this could lead to job losses due to automation efforts according to Castañón.

MEXICO’S POSITION COMPROMISED
Countries affected by proposed US tariffs on vehicle imports organized a meeting in Geneva, Switzerland to come up with countermeasures.
Meanwhile, due to changes in OEMs’ global strategies, Mexico moves away from its goal to produce over 5 million light-vehicle units by 2020. The expectation now is barely above 4 million, says Guido Vildozo, Senior Manager, Americas Light Vehicle Sales Forecasting of IHS Markit.
Kia already implemented a strategy to lessen its dependence on the US market regarding Mexicanproduction. According to Horacio Chávez, the company’s Managing Director in Mexico, the brand only exports 57 percent of its production in Pesqueria to the US, down from 85 percent at its peak.

DOMESTIC CHALLENGES
Domestic sales remain on the low side. As of June 2018, there have been 14 months of sustaineddecreases in light-vehicle sales results.
The Baja California government, backed up by Sonora, Chihuahua, Tamaulipas and Nuevo Leon, asks Andrés Manuel López Obrador’s administration to make used-vehicle import regulation a priority.
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Mexico Automotive Summit 2018 Preliminary Program

07:30
REGISTRATION
08:30
PROTECTIONISM IN A GLOBAL SUPPLY CHAIN

Automotive production has evolved to become a true global effort. While Mexico, the US and Canada have built a trade block in North America, other countries have done the same in Europe and Asia. Though most regions strive to boost regional competitiveness, rhetoric from certain countries has threatened the evolution of free trade for the industry.

09:15
ELEVATING THE “MADE IN MEXICO” BRAND
  1. Moderator: Juan Carlos Meade, Automotive Sector Executive Director at ProMéxico
  2. Panelist: Mario Rodríguez, CEO of Arbomex
  3. Panelist: Jorge Martínez, Director General of Zacua
  4. Panelist: Óscar Albin, Executive President of INA

Traditionally, Mexico has been a manufacturing-only country. After Mastretta’s failed attempt to produce a mass-market vehicle, the only successful venture in Mexican vehicle design has been VUHL’s plant in Queretaro, which is reserved for the luxury market. Now, Zacua, among others, is venturing into the competitive automotive industry as an OEM and betting on the electric vehicle market.

10:15
NETWORKING COFFEE BREAK
10:45
TECHNOLOGY TRENDS IMPACTING VEHICLE DEVELOPMENT
  1. Moderator: Ricardo Haneine, Partner at A.T. Kearney
  2. Panelist: Juan José Zaragoza, Mexico Country Leader of Transportation and Advanced Polymers at DowDuPont
  3. Panelist: Enrique Enrich, Managing Director of Scania México
  4. Panelist: Marcos Pérez, Director of Product Development at Ford de México

Industry 4.0, electrification, connectivity and self-driving technologies are all trends permeating the automotive sector. Companies are already investing in one or more of these concepts but what remains to be seen is how much they will change vehicles in terms of production and interior. What will be the role of OEMs and suppliers in the design of the car of the future and how long will it take to get from the current state to a fully connected and automated future?

11:45
HSBC PRESENTATION
12:15
NETWORKING COFFEE BREAK
12:45
INTRODUCING NEW MEMBERS TO THE LOCAL SUPPLY CHAIN
  1. Panelist: Alejandro Veraza, Managing Country Director of TI Automotive
  2. Panelist: Argenis Bauza, Head of Supply Chain LatAm Hub, KPMG in Mexico
  3. Panelist: Manuel Guevara, General Manager of Brose

The main advantage NAFTA brought to the automotive industry was to boost North America’s competitiveness as a manufacturing region. Mexico played a significant role in attracting investment from all over the world to build a strong supply chain. Participation from local companies is equally important to reach cost-competitive results. Yet, there are still holes in the production chain that could be filled by Mexican companies.

13:30
NETWORKING LUNCH
15:00
GROWTH OF CLUSTERS AND INVESTMENT ATTRACTION
  1. Moderator: Manuel Nieblas, Partner and Manufacturing Industry Leader at Deloitte Mexico
  2. Panelist: Jaime González, Director of the Automotive Cluster of the Central Region Puebla Tlaxcala
  3. Panelist: Alexandro Burgueño, Director of the Jalisco Automotive Cluster
  4. Panelist: Héctor Soto, Director General of the Automotive Cluster of San Luis Potosi

Ongoing investment has spurred the creation of new automotive clusters in regions that see the industry as an important contributor to the state and federal GDPs. With three recently created clusters and more projects to come, how is investment promotion being handled? Is there clear competition between regions or could a national development project be created to ensure the industry’ growth as a nation? How are real-estate and financing partners participating in this debate?

16:00
BATTLING STAGNATION IN THE DOMESTIC MARKET
  1. Speaker: Carlos López de Nava, Director General of Grupo Alden

Domestic market growth is decelerating, threatening company revenues and market share, especially as competition becomes fiercer and more brands enter. Following a high for sales of 1.6 million units in 2016, automakers must find new strategies to captivate clients and reactivate potentially stagnating sales or face contracting numbers in their yearly statements.

16:30
IS MEXICO’S AUTO INDUSTRY READY TO FACE CHANGES IN SUPPLY AND DEMAND?
  1. Speaker: Eduardo Solís, Executive President of AMIA

Bloomberg New Energy Finance forecasts that electric cars will overtake combustion-engine-based vehicles by 2038. Meanwhile, the US market keeps showing its preference for larger vehicles with light trucks and SUVs representing over 60 percent of the total domestic sales. Considering Mexico’s focus on compact, combustion-engine cars, how prepared is the country for what appears to be a radical shift in demand?

17:00
NETWORKING COCKTAIL

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