Despite the disruption in value chains, inflation, and a shortage of semiconductor chips, the auto industry is optimistic that it is expected to recover by 2023. In fact, Our country will begin the year as the main producer in Latin America and seventh worldwidebelow China, the United States, Japan, India, South Korea and Germany.
The automotive sector represents 3.8% of national GDP and 20.5% of manufacturing GDP, according to the Mexican Association of the Automotive Industry (AMIA) before the pandemic. Electrified vehicles, recomposition of distributors, flexibility in the business model, investments in technology and better customer service could inject dynamism into the industry.
Flexible and sustainable business model, with personalized attention: Maru Escobedo, CEO of BMW Group Mexico
AN/ Maru, how will the automotive market be next year?
The first months of the year will be very similar to the last period of 2022. The industry is very solid and there is still interest in buying cars. Individual mobility became very important after the pandemic and that helps us as an industry.
In Mexico there are many customers who want to buy or lease cars. In our case, we have a financial company that helps us so that clients have access to our cars and services. We have tailor-made plans, such as BMW Select, through which the customer pays for part of the vehicle at the beginning and during the financing term pays attractive monthly payments. At the end of the contract, the customer can exchange his BMW for a new one, refinance it, liquidate it or return it.
In general, I see that the industry has started to recover and I think that 2023 will be a good year.
AN: What changes are taking place in vehicle sales?
We have a global concept called Retail Next, which offers a face-to-face and digital experience. Customers go to virtually configure their vehicle at the dealership and then place the order. Or they can sit in their living room, view their car’s settings on a screen, and order it just the way they like and need it.
This new way of selling vehicles is already observed in almost the entire industry and, in addition, it is changing the production procedure: manufacturing processes to order are easier to manage than manufacturing to stock. This will undoubtedly help make supply chains more efficient.
We are bringing this same efficiency to the shops. The customer makes an appointment at a convenient time, and when he arrives at the service area, everything is ready to start working on his vehicle, including parts. We can see, through an app, if the car has any faults, and we immediately ask the client to take it to the agency. Once in the service, we show the client what we are doing to his car through a video, and we send him the quote. The pandemic helped us offer better care.
AN: Does making custom cars increase prices?
Not necessarily, because we have base packages and the customer configures his vehicle on them. The price depends on how equipped you want your car. Customizing your vehicle gives you flexibility in the price you want to pay. On the other hand, in finance you decide how much you want to pay at the beginning of your contract and monthly payment. A few years ago we did not have that flexibility and we owe it all to digital tools, which have benefited customer decision-making.
The production platform at our San Luis Potosí plant is also flexible, because it was developed under our The Power of Choice vision, which recognizes that drivers will always be able to choose the right transmission for their particular needs. In San Luis we can manufacture a hybrid car and immediately after a gasoline one. We have production flexibility.
It might interest you: Hybrid cars, BMW’s route to electrification in Mexico
AN: What are BMW’s plans for 2023?
Strengthen our strategy of electrification and care for the environment. Today we are the industry that invests the most in sustainability. We have launched fully electric models, such as the i4, the iX and the iX3, and next year we are going to launch the fully electric iX1 and i7. Our global strategy envisions 15 electric vehicles by 2030.
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