Daimler and BMW collaborate to set up supplier network in Mexico

Article by Christian Andrei, on November 21, 2014

German carmakers Daimler and BMW are working together to establish a network of suppliers for new plants in Mexico, according to Klaus Zehender, divisional board member for procurement and supplier quality at Daimler's Mercedes-Benz unit. The collaboration is part of Mercedes’ bid to further widen its network of local suppliers at its sites in China, South Africa, the United States and Mexico.

BMW and Daimler earlier this year each disclosed plans to make $1 billion in investments to build a site in Mexico, aiming to benefit from the country's budding industrial base as well as tariff-free access to the US. Zehender said that a cooperation between Daimler and BMW in Mexico could result to savings of around 10 percent.

He noted that the two carmakers work together where they have common interests, like setting up technical competencies among suppliers in specific plants.

He added that Mexico lacked an established network of suppliers for components suitable for premium vehicles. Zehender said collaborating with BMW to build a supplier network was part of a push to produce more components overseas where Mercedes already operates a site. Mercedes commenced output of the C-class limousine in China, South Africa and the US.

Zehender said that the carmaker has already made a move to source 60 percent of a vehicle's components from local suppliers.

He noted that as Mercedes builds more models in Mexico, the percentage of locally sourced components could surge to 80 percent. He said that to increase the proportion of components sourced locally, Mercedes encourage current suppliers to expand overseas. [source: Reuters.com]

Topics: daimler, bmw, mexico

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