Innovate, optimise, flex: ALSC Mexico showed what needs to be done to ensure Mexico maintains its supply chain edge
With concerns in Mexico over security, infrastructure and trade complexity ahead of the 2026 USMCA review, the Automotive Logistics & Supply Chain Mexico 2025 conference highlighted the need for resilience in Mexico's automotive supply chain, and how agile and efficient operations embracing technology will prosper.
There are undoubtedly numerous strategic advantages to Mexico's automotive market, from its proximity to major markets in the Americas to the tremendous pool of talent it offers, and its precisely because of these unique advantages that its so important Mexico maintains its edge as a hub for automotive supply chains.
In order to do this, it must protect itself from the many challenges it – and the industry as a whole – faces today. Geopolitical tensions, semiconductor shortages and – of course – the forthcoming review of the US-Mexico-Canada Agreement (USMCA) in 2026 all threaten to disrupt supply chains in the automotive sector.
Therefore, decision-makers in this industry must take advantage of every tool at their disposal to limit the impact of these disruptions on the supply chain. Proactive decisions, prioritising investing in innovative technologies, optimising for maximum efficiency, and ensuring flexibility and agility will be paramount to the long-term success of Mexico's automotive industry.
The conference's theme – "Maintaining Mexico’s supply chain edge: Innovation, optimisation and flexibility" – was carried throughout all three days of the event in Mexico city, as industry experts shared ideas, challenges and solutions to ensure the country remains competitive on the global stage for years to come.
Advertisement
Localisation
One of the key trends referenced throughout the conference was the that of localisation in Mexico. Peter Koltai, senior director of production control, logistics at Volkswagen de México, described a growing "nearshoring momentum" in Mexico. "We see that many nearshoring activities are happening from Europe, from Asia, and [Mexico is becoming] a hub for all the automotive industry – not only for the production sites, but also as a market," he said. Koltai cited Mexico's proximity to the US and its competitive labour costs as major drivers of this trend.
In order to effectively local supply chains, OEMs must focus on building relationships with local suppliers and ensuring they can fulfil the OEM's requirements. "Right now, I think the most important thing to improve supplier relations is transparency, working together and listening to the suppliers," Evelin Nava Castaldi, purchasing and supplier quality director at Stellantis Mexico, explained.
But Castaldi also acknowledged that, as it stands, an entirely localised supply chain might not be the best way to go, as there are still some areas in which importing from or outsourcing to other countries makes sense. She noted that striking a balance between local, regional and global operation will be key as the industry evolves. "We need the world and we need – of course – a lot of local, because it makes it easier for logistics," she said.
Trade and policy uncertainty
Uncertainty plagues the industry at the moment, largely driven by dramatic changes in US trade policy over the past year. There's no denying that since his return to the Oval Office in January, US president Donald Trump and his administration have changed the landscape of global trade, for better or for worse. The introduction of global tariffs prompted a return to protectionism in some parts of the world – a stark contrast to the trend of globalisation seen for most of the early 21st century.
"More than policy itself, what the industry needs right now is certainty – that is the magic word," said Lizette Gracida, senior director of external affairs and trade compliance at Toyota México. "We need clear rules, no sudden changes that disrupt our industry."
For Mexico, the USMCA has played a significant role in reducing the uncertainty surrounding tariffs and trade policy between Mexico and the US. However, with the trade agreement up for review next year, speakers at ALSC Mexico were unanimous in the belief that the outcome of this review will have tremendous repercussions across automotive supply chains in Mexico.
Advertisement
"I think it's a very important moment that Mexico needs to really consider how we want to play in the global arena and how we want to reposition Mexico in the competitive way that we have historically been," shared Gerardo de la Torre, regional senior director of supply chain management at Nissan Group of the Americas. "I fully agree that this is a very important moment that for all the reviews that are happening already for the USMCA, Mexico needs to take the correct approach."
He emphasised that Mexico needs to go into negotiations next year with a clear focus on the topics that matter most, noting that the talks could result in "unprecedented bad news" for Mexico if a deal is not properly negotiated and does not clearly defend the competitiveness of Mexico's automotive supply entire chains.
Supply risks and materials constraints
Shortages of key components is a key concern for automakers in Mexico and globally, with the ongoing Nexperia semiconductor crisis and the fallout from the fire at aluminium supplier Novelis' New York hot mill serving as prime examples of how supply-side constraints can impact OEMs in the short and long term.
Castaldi at Stellantis Mexico, referenced a "crisis with aluminium" and explained how, when faced with materials shortages, there is a need for OEMs to "talk to and challenge engineering" to look for solutions on the engineering side.
She gave the example of switching aluminium for steel in the production process, and noted that while this may not be possible in all cases, it is indicative of the kind of thinking and internal conversations that can perhaps give rise to out-of-the-box solutions to issues affecting the supply chain.
Castaldi also noted that an understanding of Mexico's strengths and weaknesses as a region is fundamental to its continued success in the automotive sector. She shared her view that domestic production of electronics is a point of weakness for Mexico. This, she said is something that needs to be addressed but requires time, know-how and capital investment. In the meantime, Castaldi said, Mexico should focus on its strengths, such as its well-established stamping, painting and plastics manufacturing operations.
Cost optimisation
Advertisement
Ultimately, optimising costs and remaining flexible is what will allow Mexico's automotive industry to weather the storm brought on by disruptions such as trade uncertainty and supply shortages. "I understand flexibility as the capacity to predict and adapt to sudden changes that could happen in the supply chain, and these could be political issues, economic situations, natural disasters, changes in production, or even specific requirements that our commercial partners could have," said Antonio Zepeda Torres, commercial director at CSI Group. "From our side, I think we should focus on having enough capacity to use the best possible infrastructure to counter with enough well-trained and committed human capital, as well as reliable processes and IT tools that could be versatile."
"Flexibility does not mean burning money," explained Bernardo Múzquiz Pezino, finished vehicle logistics manager at General Motors de México. "It means putting our client in the centre of what we do at the right cost."
Visibility, data and digitalisation
One of the ways in which firms can combat supply chain disruption is by embracing digital technologies to improve visibility. By enhancing the real-time insights available, firms can react quicker to sudden changes and can make more informed decisions – which will be crucial as Mexico navigates uncertainty going into 2026.
Gabriela Karthe Figueroa, production order control manager at Volkswagen de México, shared how the automaker has implemented digital control tower technology in Mexico to increase control and visibility of the finished vehicle supply chain. She explained that the control tower functions as a central command for Volkswagen de México's logistics operations, providing real-time shipment tracking and predictive risk management – enabling data-driven decision-making.
Figueroa identified a number of challenges that Volkswagen de México's control tower has helped to address, including: congestion on roads, at ports and at border crossings; geopolitical conflict, severe weather conditions; and growing expectations amongst customers for increased traceability and punctuality.
"We are not only moving cars or materials, we are moving trust," she said, adding that "visibility is not a luxury", but in fact crucial to the survival of automotive supply chains in Mexico.
Jeff Gilbertson, ISC solutions director for the Americas at Hellmann Worldwide Logistics, described control towers and collaboration as "absolutely central" to the LSP's strategy in the Americas. He likened the rise of AI in recent years to the standardisation of container shipping in the 1960s in terms of its transformative impact on logistics operations.
He outlined how Hellmann Worldwide Logistics has begun to use AI and machine learning to "scrub the world data for port congestions" and feed that information back to customers to inform them of potential delays as a means of risk management.
The predictive capabilities of AI and machine learning systems were recognised by many of the conference's speakers, who emphasised the value of harnessing this potential in order to be proactive instead of reactive, anticipating disruption and making adjustments before the supply chain feels the impact.
"Imagine a world where the supply chain is not just effective, but intelligent – where decisions are made in real time and disruptions are anticipated before they happen," said Soledad de la Rosa Gopar, inbound systems manager at Volkswagen de México, on the potential of next-generation technologies to reshape supply chains, if adopted correctly.
Also at the conference, Raúl Gamboa, head of logistics, production control and production systems at BMW Group Plant San Luis Potosí, explained out how BMW is using digital tools, new operating models and global collaboration to bolster its supply chain resilience in Mexico and across the BMW network, while preparing the plant for the next generation of electric vehicles.
The future of the automotive supply chain in Mexico
The future is bright for the automotive supply chain in Mexico, with many OEMs having shown confidence in the region. "We are supporting resilience and our message is logistics towards the future," said Volkswagen de México's Koltai. "We trust in the location of Mexico [and] we'll also build on it."
As ALSC Mexico 2025 showed, there are a lot of hurdles for Mexico to overcome over the next few years, but Mexico's strength and history as a key region for automotive manufacturing and logistics gives it a solid platform on which to do so. Mexico cannot rest on its laurels, but if OEMs, tier suppliers and LSPs collaborate, take advantage of new technologies and continue to adapt to this ever-changing landscape, the country's automotive sector as a whole will not just maintain its edge, but flourish in the global arena.
