ADAPTING FOR THE FUTURE

Mexico 2018 | INDUSTRY | INTERVIEW

TBY talks to Radek Jelinek, President & CEO of Mercedes-Benz Mexico, on brand identity, NAFTA renegotiations, and evolution of the automobile industry.

Radek Jelinek

What are the drivers behind Mercedes-Benz's growth figures, and what is your strategy to continue to break records every year?

Mercedes-Benz has been around for over 130 years, and we have always been the leader in innovation. It is always a matter of representing a brand that is interesting for the premium market from the perspective of innovation, safety, and services, which are all important to the consumer. And from a design perspective, we maintain a sexy brand. It has also become more important for our employees and the public to not only see our products and services but also how we behave, what we give back to society, how we get involved in issues in Mexico specifically, and so on. The success of the brand first and foremost has to do with the product. Five years ago, we introduced the new A Class, a new generation compact car, and people truly love its design, sportiness, dynamics, and performance. We have done our homework not only in the compact segment, but also have impressive growth in the SUV segment, with 50-60% growth in SUVs depending on the country. Worldwide, Mexico is one of the top-five countries in terms of growth. In 2016, we had 36% growth and 22% in 2017. We are number one in the premium market in Mexico.

How did you decide to construct a manufacturing facility in Aguascalientes?

There are two reasons for being in Mexico: to be part of NAFTA, which is important for the US, Canadian, and Mexican markets, and because Mexico today is number five from a manufacturing perspective worldwide and is one of the big players with excellent quality, labor laws to be fast and flexible on decisions, a large pool of young people, and great support from the different regions and the Mexican government. Overall, it is a great country for investment; the local market is growing and is close to the other NAFTA markets. Mexico also has great trade agreements with the European community.

How do you foresee NAFTA renegotiations impacting Mercedes-Benz in Mexico?

I expect there to be a discussion on the level of numbers. The main point is the US' large trade deficit and the issue is not Mexico but Asia—specifically China. At some point, the US needs to look at the real issues. I do not expect major changes, and we still have the World Trade Organization even if NAFTA is canceled or things end up drastically different. I am in fact largely unbothered because I hope people understand the business, and we are positive overall. We will proceed with our project in Aguascalientes and with our strategy.

What have been the results of Mercedes' innovation processes?

Our AMG cars, which are our high-performance cars, have 25-30% less fuel consumption compared to the previous model; traditional engines are being optimized. We recently introduced hybrid cars into the Mexican markets and will introduce more in 2018; therefore, this is the next step before fully electric cars arrive. Electric cars are the future and will arrive fairly quickly so innovation will be essential, not only for Mercedes-Benz but everyone. The entire automobile industry is changing and we do not want to become like Nokia or Kodak; we are currently successful because we are adapting. Cars are evolving into multimedia products and we need all kinds of different people working for us: more millennials and digital experts, and perhaps fewer engineers looking into the engines, especially in the future when we are talking about electric cars. Many things are also changing for our dealer network and retail; retailers will be needed, though perhaps in a different way and this will be from the perspective of commercialization.