Call our Sales Team on 0208 912 2120

M exican culture is complex: the language and many attitudes are

4th January 1996, Page 34
4th January 1996
Page 34
Page 35
Page 36
Page 34, 4th January 1996 — M exican culture is complex: the language and many attitudes are
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

Spanish, but you can't go far without detecting civilizations that existed even before the Aztecs. Mexicans share a strong national pride, but their most obvious characteristic is optimism.

These days, the main cultural influence comes from north of the border, and Mexico relies on $5bn each year from "wetbacks" working illegally in the US. Oil is a major export, so the dollar/Peso exchange rate is crucial. In the last year this has been all too obvious, as an exchange crisis led to massive devaluation of the Peso, inflation of 10% a month and virtual paralysis of the economy. Austerity measures and an export drive are stabilising the situation, while NAFTA—the North American Free Trade Agreement with the US and Canada—should assure long-term prosperity In the meantime, they need that optimism.

Haulage is important to Mexico: 90% of transport goes by road, and a journey from one end of the country to the other takes 60 hours non-stop. Goods vehicles make up 32% of the total vehicle pare, helped by an annual road tax of N$1,000 (about 485) for both cars and trucks. DERV is cheap too, at around 15p/litre.

Hauliers need an Operator's Licence, but there's no requirement for a permanent yard and fleets can be expanded without difficulty.

Construction regulations limit size and payload rather than gross weight, so Mexican trailers are heavily built. Mexico has no hours law but many hauliers, members of the National Transport Chamber, have internal regulations.

There's an American flavour to truck operations: the most successful suppliers of heavy vehicles are KenMex (the local arm of Kenworth), Dina (a nationalised firm which builds Navistar-influenced models) and Mercedes-Benz/Freightliner. A typical tractive unit is the conventional (bonneted) 6x4 chassis, with Cummins or Detroit Diesel power, usually associated with long-distance US trucking. Why should a European manufacturer choose to build a plant in such an unlikely market? Scania has...


Scania Mexico SA de CV is run by one of Scania's most experienced overseas managers, Ulf Gravesmithl. Ulf looks typically Scandinavian, but he a veteran of Angola and Brazil who admits to having "gone native". Now he reports to Scania Latin America in Brazil, but that's several thousand miles away.

Gravesmthi's biggest potential problem has been the volatility of the Mexican market: successive years in the mid-eighties saw tractive unit sales yoyo from 3,600 to 450 and back up to 1,400. Annual demand grew to around 5,000 vehicles but the currency crisis threw a spanner in the works: sales for one month fell from 559 in 1994 to just 16 last year—a 97% drop.

With imports effectively barred, Scania opted for an assembly plant in Mexico and settled on San Luis Potosi, a city around 300km to the north of Mexico City. A 4,500m2 factory was built on a green field site, 27 blue-collar staff were recruited from 4,000 well-qualified applicants, and Mexican engineers and co-ordinators (Scania doesn't say "foremen") were sent for training in Brazil.

In charge is Bengt Olsson, a more typical Swede than Ulf Gravesinuhl—quiet, with humour as dry as the Mexican plains. He set up the Tocoman plant in Argentina which supplies Mexico with GRS900 gearboxes, and he's used to local difficulties such as the civil war which drastically altered the guest list at Tocoman's opening.

The clean, airy plant has a nominal shift capacity of 600 trucks per year, but Olsson is O. confident that with 40 well-trained workers that could rise to 1,000. The break-even point is around 250.

The first stone was laid at San Luis Potosi in May 1994, and the first truck was rolled out in December. The currency crisis struck 10 days later and since then, the plant has put out around twelve trucks per month: "1995 is a lost year," says Olsson, but he is confident of the plant's long-term future. Some of that Mexican optimism must have rubbed off


Scania's Mexican product is a head-on challenge to the conventional way of doing things South of the Border. True. the T113 sticks to the bonneted 6x4 formula, but it differs in one important respect from the competition: every part is Scania. Mexico expects a driveline package from Cat, Cummins or Detroit Diesel, Eaton and Rockwell. But the 340hp 1113, a bonneted version of the familiar 3-Series, has an allScania drivetrain assembled from Sweden, Brazil, Argentina and Mexico.

Will the formula work? Well, it succeeded in Brazil, where the T113 became Truck of the Year 1995, and the integrated driveline has already been accepted by Mexican bus operators.

The Mexican-built 1113 can be built with a steel-suspended "light bogie" rated at 21 tonnes, and this variant has won orders for 40 trucks from Chile.

There's an obvious question: is Mexico simply a bridgehead for an assault on the US market? It seems unlikely. NAFTA will make things easier, but a much larger operation would be necessary to make an impact on the rest of North America.


The Mexican spirit is obvious in Dr Jorge Jimenez, chief executive of Scania's Mexican distributor. Unfailingly optimistic, he has put much of his own money (as part-owner of a 3,000vehicle bus company) into the operation but he does not seem to have rose-tinted spectacles—an MBA, he has a steely grip on the nation's economy and no illusions about

the unpredictability of the truck market.

"We have to make history on a daily basis," says Jimenez,starting by convincing Mexican operators that the T113 is a viable product. Nothing but a demonstration will work, and, with depots only in Mexico City. Guadalajara and Monterrey, the company has undertaken a punishing round of roadshows. A video describes Scania's worldwide operations, emphasises the allScania drivetrain and explains, point by point, why the T113 beats the US-based opposition in every respect from turning circle to seat adjustment via visibility and the tidiness of the fuse box.

Next, they put vehicles out on demonstration: this started in 1994 with 50 "seed" vehicles imported from Sweden. Drivers initially perceived the cabs as small, but eventually grew to appreciate the integrated design and the lack of a US-style "doghouse" engine hump.

It's no use attracting customers if they can't stump up the money, so Scania negotiated a finance agreement with Citibank: trucks are paid for in US dollars, borrowed at 14.8% (when Mexican treasury bonds pay 25%, this makes good sense). Contract hire is not yet available.

It's equally difficult to convince hauliers to give up self-sufficiency and contract out maintenance—the distributors have mobile workshops, and a million dollars' worth of spares. Dealers need to be recruited who can accommodate this attitude, and preferably not from existing rivals: "You can't teach an old dog new tricks," says Jimenez,


Imagine introducing an unknown truck to the UK and selling it straight into the Stobart fleet. That is effectively what Scania has done, delivering an initial batch of 30 trucks to Marco Antonio De La Torres, Mexico's second-largest operator. Any preconceptions about the Mexican haulage industry are blown away as you enter De La Torres' depot on the outskirts of Mexico City. When CM visited, a storm in Veracruz meant that the concreted yard was full of tractors and trailers, an impressive array of Kenworths and, of course, Scanias, with dozens of brilliantly polished tanker trailers. The most remarkable sight was De La Torres' office; a luxurious marble-and-timber "ranch house" containing antique furniture and oil paintings of the proprietor's racehorses, set in a perfect lawn bang in the middle of the depot.

De La Torres specialises in bulk liquid transport for customers including Procter & Gamble, Du Pont, Nabisco and Exxon. Much of the work is cross-border, in collaboration with US giant Montgomery Tank Lines, and the company remains busy despite the economic crisis. But De La Torres is diversifying into dry freight. Most Mexican operators use 45ft or 48ft trailers, but Marco Antonio has bought 53-footers. There's a problem: De La Torres' 130 Kenworth tractors are so long that the rigs exceed Mexico's 20.8m overall length limit. But the firm's Scanias—part of the initial batch of 50 trucks imported from Sweden and paid for in cash--are compatible with the longer trailers.

The KenMex Kenworths have 410hp Cummins engines, and are still quicker with the heavier tankers than the 340hp Scanias. Torres has tachographs fitted, with a fourhours-on/one-hour-off rule. Kenworths are maintained in-house by De La Torres' 40 mechanics while the Scanias are on a contract maintenance deal (KenMex has just proposed a similar cost-per-kilometre scheme),

The ultimate goal is move into full-scale cross-border work, just as soon as NAFTA allows. Is this the opening that Scania needs? U by Toby Clark

comments powered by Disqus