MEXICO CITY -- Mexico's auto industry has launched a long-term effort to develop a national network of Tier 2 suppliers.
Tier 1 suppliers, the global giants that ship parts directly to automakers, are well represented in Mexico. But they import a lot of parts and raw materials that they need.
While Tier 1 companies in Mexico produced parts valued at $76.8 billion in 2013, imports of the components they use totaled $38.8 billion, 7 percent higher than in 2012, according to INA, the national association of suppliers.
"It's a question of reducing this $38 billion total to $25 billion by 2019," said Oscar Albin, INA's executive president. "That's our goal."
If Mexico can source more parts and raw materials at home, that means more jobs and tax revenue.
Among the items imported in 2013, according to INA, were copper, aluminum and alloy cable and wire ($1.78 billion), tires ($1.63 billion), seats and parts ($1.22 billion), harnesses ($904 million), steering column parts ($554 million) and disc brake mechanisms ($534 million).
INA and other automotive trade groups launched the effort 18 months ago. Helped by several million dollars' worth of government funding, about 100 Mexican Tier 2 suppliers have improved their manufacturing processes to meet international standards, Albin said. "Attitudes and focuses are changing."