INTERVIEW: Innovation and competitiveness: Prince Manufacturing’s vision in the automotive sector
By Jorge Saldaña MEXICONOW
The automotive sector in Mexico is constantly evolving, facing new challenges such as digitization, the arrival of global competitors, and the transition to more sustainable mobility models. In this dynamic environment, innovation and adaptation are key to maintaining competitiveness.
In this interview, Francisco Carreón, VP of Operations in Prince Manufacturing, Inc., shares his perspective on how the industry can meet these challenges, seize opportunities, and strengthen its position in the global supply chain.
How would you describe the recent evolution of the automotive sector in Mexico and its impact on the national economy?
We are experiencing a very important moment of technological transition. There is a lot of innovation underway, and that represents a great opportunity for Mexico: an opportunity to advance the technification of our workforce and better prepare ourselves for these changes. Many companies are arriving, and it is essential that we work in a coordinated manner between the state, federal, and municipal governments and industrial clusters to properly integrate supply chains.
When those chains do not exist, we must build them. Through strategies such as nearshoring, we have to attract suppliers—especially from Asia—who are strong in areas where Mexico still has significant gaps. For example, we lack electronic components, special finishes, precision plastics, high-precision plastic and aluminum injection processes, and smelting capacity.
In my experience, I often meet with suppliers interested in establishing themselves in Mexico, but who cannot find an adequate supply network. This forces them to continue importing inputs from China or India, which increases their costs and hinders their local integration.
This becomes a barrier to the arrival of large manufacturers (OEMs) that want to produce in Mexico but cannot do so due to the lack of local suppliers. Therefore, one of the biggest challenges we face is precisely that: integrating new suppliers, new technologies, and new players into our national supply chain.
Mexico is the world's seventh largest vehicle producer. What key elements have sustained this position in the global market?
Well, definitely one of the main factors in our favor is our proximity to our neighbor, the United States. This geographical element is key. Secondly, we have a relatively stable environment at the federal and state levels, both politically and economically. We have public policies that provide legal and economic certainty, which is essential for attracting investment.
As we mentioned a moment ago, Mexico has managed to position itself as an attractive country for foreign investment, particularly in the automotive industry. Thanks to these factors, we now occupy a privileged place on the global automotive manufacturing map.
However, we must be clear that this leadership is not guaranteed. We can lose it if we do not act strategically. We are currently facing a complex geopolitical context, especially with the imposition of 25% tariffs on exported vehicles, which is clearly unsustainable. This measure not only impacts Mexico, but is also directly affecting the U.S. automotive industry.
Therefore, it is urgent that our government sit down to negotiate, firmly and clearly, with its counterparts in the United States. We need a serious dialogue that will lead to the elimination of these tariffs, which, far from protecting, are harming the large automakers (OEMs) and hindering the integration of the region.
Furthermore, with the growing presence of Chinese brands in Mexico, these types of trade barriers only create more distortions in the market. We are not helping either our industry or that of the United States with these measures. It is time to rethink the strategy and focus on solutions that benefit both parties.
What progress have you seen in the adoption of electric vehicles in Mexico? & What is needed to accelerate this transition?
Well, as we mentioned a moment ago, one of the main challenges continues to be infrastructure, particularly with regard to electric mobility. There is still a significant lack of charging points in many cities, which significantly limits the mass adoption of electric vehicles.
For example, charging a lithium battery overnight requires a considerable amount of energy. For this to be viable, we would have to renovate and strengthen our urban electrical grids, as well as establish accessible and strategically distributed charging stations.
If we were to say today that 50% of the city of Chihuahua is going to adopt electric cars, there simply would not be enough infrastructure. We would have huge lines of people waiting to charge their cars, with wait times of up to 30 or 40 minutes per vehicle to reach an 80% charge. Imagine that scenario: hundreds of people, each occupying a charger for almost an hour.
In many cities, there are only five or six public charging stations, some with four or five chargers, or in the best case, shopping centers with ten chargers. But that is clearly insufficient to serve the total volume of a city's vehicle fleet. It is not feasible at this time.
That is why, as we mentioned, many users are opting for hybrid vehicles, because they offer greater range and efficiency. These cars operate on a mixed system: at high speeds, they run on the electric motor, which reduces fuel consumption, and when necessary, the internal combustion engine kicks in. This system allows for significant savings and greater mileage per liter.
In addition, the battery is automatically recharged by systems such as the vehicle's alternator, allowing it to continue generating energy without relying exclusively on an external charging network. And in some cases, if the vehicle is a plug-in hybrid, you also have the option of connecting it to the power grid if you don't have access to a gas station.
In short, hybrids now offer a more realistic solution for many people, at least while we develop the infrastructure necessary for a complete transition to electromobility.
What opportunities do you see for Mexico to strengthen its role in the new global mobility paradigm?
Well, speaking of mobility, we are already seeing a clear trend in other countries: more and more people are giving up their own vehicles. The use of services such as Uber has grown enormously, and the interesting thing is that there are already fully autonomous models, i.e., driverless vehicles that arrive, pick you up, and take you to your destination.
The same is happening in the freight transport sector, where virtually autonomous solutions are already being implemented. Technology is clearly moving in that direction.
However, as with electric vehicles, the adoption of this type of technology will take time. It will not happen immediately, but it does seem to be the natural path toward the future, unless disruptive technologies emerge that change course.
For example, we are not yet talking about hydrogen-powered cars, an alternative that is gradually gaining momentum. Although still in its early stages, it could become a viable option. However, it will require a completely different infrastructure, as charging a vehicle with hydrogen does not work in the same way as with electricity or gasoline.
In short, everything will depend on how prepared we are as a society and as a country to support the introduction and adoption of these new technologies. That will be the key factor in moving toward more efficient, sustainable, and technological mobility.
How do you see the Mexican automotive industry in the next 5 to 10 years?
Well, we were just talking about this a moment ago: I think we are going to see significant growth. The Mexican economy has good prospects and will continue to advance. Much of the vehicle consumption is already staying in Mexico; that is, not everything is destined for export as before, but the domestic market is also growing.
We will continue to export vehicles, even with the current tariff barriers. Despite the tariffs, our neighboring country continues to buy cars produced in Mexico. The difference is that now they absorb that additional cost themselves, which, of course, has impacted production volume. That's a reality.
We saw this clearly in February and March, when these tariffs were imposed: plants such as Stellantis in Toluca, Ford, and several others in the Bajío region suffered immediate impacts on their operations. However, even in a pessimistic scenario—in which these tariffs continue for the next three years of the current US administration—there is still hope that a future administration will decide to eliminate them, which would considerably improve the outlook.
In addition, we are now entering a process of reviewing the USMCA, which may also have important implications. The current U.S. administration has shown a strong inclination toward protectionism, artificially favoring certain industries, and this is directly affecting us.
A clear example—and one that is not being discussed enough—is the 50% tariff on Mexican steel, a measure that seriously impacts us, especially those of us in the manufacturing industry. In our case, as we produce sheet metal components such as boxes, cabinets, and structures, this tariff has made inputs considerably more expensive. Our customers now have to pay a very high additional percentage on the material content, which reduces our competitiveness.
In summary, although the current environment presents several challenges, internal growth and the resilience of our industries remain key factors. But to maintain that momentum, it is essential that the Mexican government act strategically in trade negotiations, especially in the face of measures that are clearly affecting us.
