EconomyFinancialMitsubishi seeks auto parts suppliers in Mexico

Mitsubishi seeks auto parts suppliers in Mexico

A delegation of executives from the Mexican subsidiary of Mitsubishi traveled to Japan at the beginning of August to receive, from Takao Kato, global CEO of the brand, a “certificate of appreciation” for the sales volumes, market share and profitability obtained. in the Mexican market. But beyond the paper, this recognition opens the door for the Mexican subsidiary to expand the operations of the brand, beyond the sale of vehicles.

“Now the questions from our parent company are: what else can we do in Mexico,” says Jorge Vallejo, president and CEO of Mitsubishi Motors Mexico, in an interview.

The most immediate answer to this question is to create a supplier base that can supply parts and accessories to the local market and even to others in the North American region.

“All these supply chain disruptions that we have seen since 2020 have made the need to locate suppliers visible,” says Vallejo. “In our case, for example, we will start by looking for suppliers of spare parts and accessories,” he adds.

In April, the Japanese brand warned that the new outbreaks of Covid-19 in January and the shortage of containers had generated that each month it must supply its distributors, to support a vehicle fleet of 50,000 units that roll in the country with the logo of the brand. Most parts arrive in Mexico by sea from Thailand, Indonesia and Japan .

Now the Japanese brand sees the possibility of regionalizing the supply of spare parts in order to reduce dependence on Asia. “It is changing the production that is already in place in some Asian countries to use the supply chain that already exists in the country,” says Vallejo.

“But this is only the beginning,” he adds. “He is in fashion and Mexico can be a very important hub to produce parts and spare parts for the region… And, well, later we would talk about all the additional elements to establish a line of vehicle production.

Other companies in the sector have followed a similar strategy before establishing an assembly plant in the country. BMW, for example, launched in 2009 a strategy to develop a base of 64 suppliers in the country. Having her was key so that five years later, in 2014, the company decided to establish an assembly plant in San Luis Potosí. Now Mitsubishi could follow a similar path.

The marketing of the Japanese brand began in Mexico in 2000, under the umbrella of Fiat Chrysler, which had signed an agreement to import and market some models of the brand. But in 2019, Mitsubishi decided to establish its own subsidiary in the Mexican market.

Since then, the Japanese brand has been climbing positions to occupy the 14th place, out of 37 brands that report their sales figures to Inegi. Between January and July, Mitsubishi sold just over 10,500 units, equivalent to 1.7% of the market share, from 1.4% in the same period of 2021, when it sold 8,173 units.

“What does not grow, decreases. And what we want is to continue growing (…) We are going to go step by step. Without a doubt, the first step is to consolidate this group of suppliers and then continue exploring a total line of vehicles”, concludes Vallejo.