The Business Year

Benoí®t Henry

General Director, Continental Tire

We have 20 plants across Mexico from where we serve the world by providing different products from Continental’s divisions. Without a doubt, the Mexican market is a huge one. There is a large market for both trucks and passenger car tires in this market; it is among the top 10 in the world. We are focusing only on the tire industry because it has grown every year between 5 and 10% since 2008. For the first time in 2017, the market is down 5 or 6%. For the first half, the market was fine; now, for the first time in more than 10 years the market is down. However, it is clear the fundamentals of the market are excellent. We have a young population and ambitions to own a car are big. The population will purchase a car, despite the limited space within Mexico City. On the truck side, it is a large market with a big gap to be filled. The market will return and growth will resume. We have programs explaining that fitting a quality Continental tire is cheaper than fitting a less expensive, lower quality tire when we consider the lifetime of the product. As the market becomes more aware, I am certain the truck tire industry will progress and reap returns.

Pedro Collier

Operational Director, Embraco North America

The North American market is extremely important for us in terms of global strategy, not only because of its size but also because of the number of customers we have here. Having a facility here is not just for the supply chain; we rely on our staff in both Mexico and the US to improve the partnership and relationship with our customers. This team of professionals for customer service and technical support is dedicated to provide the best products and solutions. Over the past five to six years, we have increased our relevance here significantly. Today, we have 1,300 people in Mexico, in addition to the sales office and warehousing in Atlanta. It has been a major driver for us here in North America, and we continue to focus on finding different ways to deliver value to our customers and improve our operations globally. We focus on two things: innovation and sustainability. On the innovation side, we invest 3-4% of our revenues in R&D. Today, globally we have almost 600 people who are dedicated to research technology and innovation. We have 47 labs around the world for R&D. At last count, we had 1,700 patents granted worldwide, and almost 60% of revenue in the past five years came from products launched within the same period.

David Gold

General Manager, David Gold

The first priority for Hisense while expanding into Mexico was first and foremost the domestic market. Our analysis, supported by the World Economic Forum, is that the Mexican domestic market will be one of the largest in the world and among the top 10 in the near future. The second aspect was Mexico as a manufacturing base. Mexico is blessed with many benefits in that sense and has worked hard to establish many other benefits such as raw materials in the country and its proximity to the massive North American market. There is a well-established supply chain of raw materials, and many other components that can be purchased, and those are things that are not easily replicated around the world. China maintains its advantages as a production base even though salaries have increased and a big part of that is also due to its existing supply chain. Mexico has similar benefits as a production base. We are a conservative company. We believe in growth at a reasonable—but steady—rate, and part of that culture goes into how we make investment decisions. Our timeframes are not six, eight, or 10 years; we look at 20-30 years.

Daniela Cavinatto

General Manager, LEGO

The LEGO Group is extremely pleased to be in Mexico. We started with LEGO Mexico in 1994, and we truly believe in the potential of the country. Mexico plays an important role in the LEGO strategy. We have a major factory here, which is a testament to that. The factory employs 3,500 colleagues that produce high-quality products for the entire Americas market. We touch the lives of millions of children across the region with this factory. In addition, Mexico is also an important market for us. There are many children here that we want to reach with our creative play experiences. We are extremely pleased with our location near Monterrey. We have access to great colleagues with the right skills, which is extremely important. We are also committed to our presence in the region. We are extremely engaged and committed to our employees, who play a key role in delivering our high-quality products. We also focus on our corporate social responsibility. We do this through our commercial branches, LEGO Education, or the LEGO Foundation. Mexico is one of the countries where we have great interaction between the commercial side and the foundation.

Luis Hernández

Country Manager, Caterpillar Mexico

Caterpillar has a significant footprint in Mexico. We have 21 manufacturing facilities throughout the country, mostly in the northeast, including in Monterrey, Torreón, and Reynosa, and more than 11,500 employees in the country. Moreover, our three dealers Madisa, Tracsa, and Matco serve our clients in the Mexican market. We have a diverse production coming out of our manufacturing facilities here, from gas turbines to trucks, machine components, and after-service parts. Certainly, Caterpillar sees Mexico as a strategic ally in its pursuit of global competitiveness. Our facilities are constantly being reviewed and evaluated for the potential sourcing of components and value-added work. At this point in time, I see organic growth with the products we are already producing. Caterpillar Mexico has gone through an evolution, and things have changed for the better in the technological space. Through the talent and entrepreneurship of our employees, we have advanced from being just low-cost manufacturing facilities to going more and more into product and process design and innovation. Since processing technologies have evolved to increase the competitiveness of our facilities, we have to go with the latest trends.

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