AUTOMOTIVE IndUsTrY In MExIcO Ready to Overtake - ProMéxico

30 Negocios ProMéxico Negocios ProMéxico 31
VolkswageN
IN MexICo
FroM the “Bug”
to the hyBrid cAr
Volkswagen has been deeply involved in the evolution of the Mexican
automotive industry over nearly five decades, establishing itself as a major
generator of jobs and a training center for thousands of auto workers.
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Since the second half of the 20th century, Volkswagen has
won a place in the contemporary history of Mexico as a
major promoter of the automotive industry, even creating
a Mexican pop culture classic, the Type 1 model, also
known throughout the country as the Vocho ”Bug”.
“In Mexico, like in Germany and Brazil, this model was an
important element for motorizing the country,” recalls Thomas
Karig, director of Corporate Relations and Strategy at Volkswagen
de México, referring to the car that the German company produced
at its plant in Puebla until the year 2003.
At the current juncture, with Mexico positioned between the
main producers and exporters of light and commercial vehicles
for the global market, Volkswagen is also going through a stage
by omar magaña
photos courtesy of volkswagen
of transformation and growth and is now taking advantage of
the acceleration being experienced by the country’s automotive
industry while adjusting itself to new technological needs
within the sector.
“We’re about to start up an engine plant in Silao, Guanajuato,
for later this year, which will provide a new generation of engines
both for the Puebla plant as well as for the one in Chattanooga, in
the US,” reports Karig.
Meanwhile, the Cuautlancingo, Puebla plant –with which Volkswagen
started operations in Mexico in 1967 and which set a new
record by producing 500,000 units in 2011, exceeding the 450,802
units produced in 2008– is currently working on the hybrid version
of its Jetta model, featuring thermal and electric motors.
Volkswagen is the world’s third largest producer of light and
commercial vehicles, with 7.3 million units emerging each year
from its 48 production facilities located in Germany and six
countries in the Americas, Asia and Africa. Moreover, it’s at the
forefront of companies that have invested in the research and
production of environmentally-friendly diesel engines, which
are smaller and ensure higher performance with lower fuel consumption.
The investment made by the firm for the manufacture of such
engines in Mexico amounts to 550 million usd and the company
expects an annual production of 330,000 units at its plant in Silao.
Between the company’s arrival in Puebla and this recent
initiative, Volkswagen de México has gone through three major
stages, described by Karig as follows: the first runs from the 60s
to the late 80s, the period in which the company mainly supplied
the domestic market. It was marked by the Safari, Combi, Brasilia
and Caribe lines, established as iconic names in the country’s
automotive market.
The second stage lasted from the late 80s until the signing of
the NAFTA in 1992, a time when the world economic downturn
pushed the company to move production from its plants in the US
to Puebla, from where it met the North American market demand.
In the third and current stage, Volkswagen de México concentrates
fully on car exports, taking advantage of the benefits arising
from many free trade agreements signed between the country and
the rest of world.
The Beetle was born in 1997 and became the firm’s first vehicle
manufactured in Mexico for sale on the international market. It
took just a few years for the updated and modern sedan with the
“hump” to entirely replace its predecessor, the legendary “Bug”.
By the end of 2012, the Puebla plant will have produced 300,000
Jetta vehicles, 120,000 Beetles, 120,000 Golf Sport Wagons, and
50,000 Jetta Classics, according to estimates by Karig. About 80%
of that production will be exported, with the US and Canada as
major destinations.
Prior to the initiative of the diesel engine plant in Silao, the German
firm had announced its intention to strengthen and expand
its participation in Mexico. In 2009, it invested one billion usd to
expand its plant in Cuautlancingo, Puebla for the construction of
what’s known as the Western Segment, from where the sixth generation
Jetta model units have emerged since mid 2010.
That has led to a payroll increase within Volkswagen de México,
considered the company that generates the most jobs in the state
of Puebla –Karig reports the presence of 18,500 employees.
In fact, throughout these nearly five decades, the company has
maintained its reputation not only as a creator of jobs but also, and
above all, as a great mechanics teaching workshop where generations
of automotive technicians have been trained. That is another
key point for the firm’s attachment to its environment.
“Every person in the workplace must have well-founded and
precisely-targeted theoretical and practical knowledge in order to
undertake their tasks perfectly,” notes Karig.
On the one hand, there are the high school graduates who enter
the plant and go through a process of technical training for over
three years, after which they get their diploma; and on the other,
engineering graduates passing through a period of “training and
apprenticeship including, in many cases, classes in Germany for a
year or two,” explains Karig.
“The product is constantly modified and adapted and those are
activities carried out by engineers from our technical development
area in Mexico. That was the case with the new Jetta; much of the
detailed engineering of the vehicle was done here,” Karig says.
After a long history of productive relationship with Mexico, an
experience that other competitors in the industry are just beginning
to develop, Volkswagen foresees a profitable future due to
its vast knowledge of the features of the workforce in the country.
With the numbers rising in Puebla and the start of activities
in Silao, the best is still to come. According to Karig, the most
important of these movements within the industry is the effect
generated between large and medium companies that supply
auto parts and specialized technology because they recognize
the appeal of setting up in Mexico to be near the assembly plants
they stock, encourage competitiveness and, most importantly,
create jobs. n
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