Our EP Automotive & Electronics director, Alexander Katsouris, explains why Mexico is a privileged site for OEMs and their Tiers regarding nearshoring, local production and partnering strategies post-COVID-19.

The global supply chain is unquestionably experiencing one of the most challenging moments in modern day history. Industrial organizations with complex buying processes of raw materials, components and finished goods, which are transported across continents are now facing several disruptions throughout the value chain, such as purchasing issues, logistics and storage factors, low service capacity, volatile rates and saturated logistics hubs.

These are just some of the immediate issues faced due to the COVID-19 situation, which has turned this business model upside down and now has companies analyzing once again the benefits of nearshoring and national production strategies.

Is Mexico in a Privileged position?

Natural national advantages

Over the last seven years, Mexico has seen the presence of many brands of OEMs that invest heavily in the region for its global logistical privilege, as well as skilled labor and cost competitiveness, taking all factors into account.

Many of the OEMs already brought along with them huge investment of Tier 1 and 2 suppliers. Yet, many of those Tiers are heavily reliant on other T2 & T3 suppliers in other regions of the world, such as Asia & Europe.

Companies are now having to source locally to reduce the length of the buying stream which, in turn, reduces risk factors in the value chain.

Mix this scenario with the fact that the USMCA/TLCAN is finally being settled – which will help to further encourage regional growth through increased local buying, selling and production agreements.

It’s highly possible that leading automotive suppliers (as well as other major manufacturers) related to key projects –and clients of theirs– will further invest in Mexico in years to come. This may be good news for some, whilst for others, a new lesson to be learnt in logistics.

Mexico has a land mass similar to that of Western Europe, so diverse transportation solutions are needed in order to overcome time challenges as well as to mitigate other risks that are present in the Mexican market. In the logistics sector, it is imperative to be able to attend these requirements and that’s where we come in.

At Europartners Group, we cater for these needs through the recently developed automotive corridor servicing LTL milk runs, National Expedited trucks, FTL inter-state services as well as for northbound/southbound border crossing. We have also seen the increased need for warehousing, as well as a growing trend for the combination of certified, trusted suppliers to handle last mile deliveries.

What are we doing for our clients?

An example we worked just last month (May, 2020) was a tailor-made project with 24/7 response and tracking system, managing approximately 170 trucking deliveries implemented for a world-renowned OEM in the Bajio region.
Whether it’s for a dedicated truck going from a maquiladora at the northern border for delivery into the Bajio region or it’s a national air freight solution with a pick up from a Tier supplier in Toluca which will then be expedited to an OEM plant in Ramos Arizpe, we provide a variety of domestic freight solutions.

Connecting minds to move the logistics industry

Our national reach with 25+ offices in Mexico, own personnel present in all seaports, airports and boarding crossings, as well as major industrial cities helps us to attend all client’s national logistics requirements at first hand.

At Europartners Group we’ve built a selection of highly qualified professionals with expertise to attend the automotive industry having the abilities to design distinct plans for each supply chain’s general and most specific needs, coordinated among several transportation modes.

In markets like todays, clients require a variety of services with loyal partners working consistently and effectively, even in this year’s most complicated of days.