MEXICO - Industry
Managing Director, Navistar México
Carlos A. Pardo García graduated from the Anahuac University in Mexico, where he obtained a degree in Business Administration. He served as Commercial Director for Allied Signal in 1996. In 2000 he joined Ford Motor Company and Navistar in 2006. He was appointed, in 2011, as the CEO of Navistar México.
For over 80 years, the brand has been present in Mexico, selling technology to companies operating directly in Mexico. In 1996, we returned to the country and established ourselves again, ultimately opening an assembly plant in 1998 in Escobedo, Nuevo León. More than 40% of the total vehicle parts in Mexico use our technology. The factors leading to our success stem mainly from the investments of more than $400 million we have made in Mexico over the past 18 years. Our most important investment has been in local talent. I am proud to say that we have almost 4,000 employees in Mexico, all Mexicans, which is rare for a transnational company.
It was a particularly a complicated year. The Mexican market contracted by 14%. Navistar did well despite this, declining only 1%. Our market share grew by 26%, 3.5pp more than expected. At our Escobedo Plant we produced 60,000 units in 2014, making it a record year.
Most of the gain is organic, but Navistar plans to introduce new trucks to segments of the market, which will give us an edge over the competition. Our company has also developed the biggest and best equipped training center in the country, where we have materials, tools, and truck driving simulators to train customers, drivers, technicians, and our dealers’ sales force. We also plan to train close to 4,000 people during 2015 and will be opening our second training center this year. We have also built an extensive dealer network of close to 85 points across the country.
Innovation is a key driver for our company. If you consider heavy vehicles, performance and fuel consumption are extremely important, especially in a country where prices continuously increase. Comfort for the driver and innovative truck design have drawn people to the market. Being ahead of our competition is vital, and Navistar provides more than great trucks. We have one of the largest portfolio of products and services, and supply our customers with a complete solution in everything truck or bus related, from financial solutions tailor made for trucks, buses, parts and services, and even access to a specialized insurance broker.
The financial side of the company plays a significant role. Last year, 50% of our trucks sales were realized through our financial company, and we aim to aggressively surpass that figure by 10%. The financial company has a good understanding of the different needs of each market segment, and we are working constantly to create tailor made solutions. Two years ago we created Navistar Leasing, and last year we sold over 1,000 trucks under this type of financing. This is just one example of how Navistar innovation encourages the market.
One of the most obvious advantages is the highly knowledgeable and specialized Mexican work force. The logistical cost factor is also crucial. Monterrey is a strategic location for exports to the US and Canada, because of its proximity to the border, and the government in Monterrey helped us greatly in establishing our plant. We are also close to Tampico from where we export trucks to Latin America and Africa. Almost half of the trucks produced worldwide were produced at our Mexican plant. Last year as a company we had sales exceeding $12 billion, with $3.5 billion of sales being made in Mexico.
The average age of buses in use in Mexico is around 20 years, so new buses and general innovation in vehicles is something we have been waiting for years. Old trucks and buses are more expensive to maintain, they consume more diesel, and they negatively affect the health of drivers and community through pollutants. It is important that we do something as a country to address this problem, and indeed some cities have started the initiative. Our company will use the opportunity to provide products to meet this need, especially in high-volume areas like Mexico City. As an example, there are municipalities that need garbage trucks, and we are working with various regional governments, states, and NAFTA. It is also important for us to develop the credit conditions enabling truck purchases.
In the local market, we can expect growth of around 10%. It is going to be a difficult first half of the year for the sector due to the current exchange rate and upcoming elections, although I expect a recovery in the second half of the year. Specifically for Navistar, we have a highly aggressive plan to increase our market share and expand our customer base. Our projection is to grow by a few more percentage points by the end of the year.
© The Business Year – May 2015
MEXICO - Agriculture
General Secretary, National Food and Commerce Union (SNAC)