Digital upgrade in the automotive supply chain in Mexico: issues and challenges
Jorge Carreto Sanginés, Pasquale Pavone, Margherita Russo and Annamaria Simonazzi
Abstract
The ongoing digital transformation poses diverse challenges to the automotive sector. While the process of digitalisation will lead to technical and organisational changes across and within the global value chains, the ongoing changes in the trade agreements spurred by the Trump administration may change the location advantages of previous plants and their specialisations. In addition, investment in the electric car may offer first-mover advantages in markets, while requiring the re-organisation of the value chains. Mexico, ranked in 2018 as the seventh producer at world level, is an important case study for several reasons: among these, its cost advantages, its privileged access to the US market, that attracted many OEMs from Europe, Asia, the US, and its role in the prospective regionalization of world trade. By using interviews to automotive suppliers, experts and business associations of the automotive industry, the paper aims at providing a first outline on issues to be addressed in an analysis looking at how these changes are affecting opportunities for the OEMs in their value chains based in the Mexican automotive system.