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Mexico and The United States: A Team Working in Tandem in the Automotive Industry

13/02/2017

Mexico and The United States: A Team Working in Tandem in the Automotive Industry

The automotive industry continues to grow in Mexico. According to Mexico’s Automotive Industry Association, vehicle production increased by 2% in 2016. The amount of exports in the United States also grew. Currently, the American market makes up 77% of sales abroad and also plays a leading role in imports. Mexico is the fourth largest consumer of American automobiles and the second largest consumer of trucks, buses, and automotive parts.

This relationship has led the United States and Mexico to work in tandem with one another in the automotive sector. Mexico is home to large American automobile plants such as Ford, General Motors, and Fiat Chrysler, which are responsible for more than half of the exports.  However, many of the automobile suppliers and assemblers must complete their work from the United States. This poses a challenge when it comes to managing communications and the supply chain in an industry that works with strict systems such as just-in-time manufacturing.

Team Work

The automobile suppliers and automobile assemblers must work as a team despite the distance and technical capabilities of each company. For this reason, EDI has become a fundamental resource for maintaining fluid communication along the supply chain.

The operation is very simple. The different entities involved in a commercial relationship can exchange electronic information in real time according to warehouse stock levels or according to engineering specifications through CAD/CAM files, thanks to the standardization of messages (EDIFACT, X12, XML, etc.) This electronic exchange of information also ensures the security and integrity of the data.

However, supply chain management is not the only challenge facing companies in this sector.  For American companies that do business in Mexico, the adaptation to tax compliance requirements such as e-invoicing also posse some difficulties. For this reason, EDICOM has developed a platform of integration for Mexican automobile suppliers that service American automobile companies. This solution incorporates the AS2 connectivity with the suppliers’ plants so electronic data interchange can be fluid and seamless. Furthermore, this platform conforms to the requirements of Mexico and other Latin American regions in regards to tax compliance.

This integration solution with suppliers incorporates global e-invoicing which includes the accession of addenda and automates the generation, declaration and sending of online electronic invoices according to the requirements established by Mexico’s tax administration.

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