JATCO Mexico is a pioneering organization, due to its high-quality and eco-friendly service and products. Rachel Hartman reports how this company now seeks to reach the next level. The key, she indicates, involves CVT, or continuously variable transmission. The company gears up for forecasted greater demand for its products.
JATCO Mexico, located in Aguascalientes, has experienced several significant firsts. For instance, as a manufacturer, it operates the group’s first plant built outside of Japan, reveals Mauricio Velázquez, customer service and logistics manager. The company is affiliated with Nissan Motor Company, Ltd. and manufactures continuously variable transmissions (CVTs) for cars sold throughout the world.
JATCO Mexico runs a plant that encompasses 187,635 square meters, employs 1,600 workers, and boasts two manufacturing lines, both of which produce CVT2 transmissions for four cylinder vehicles.
To understand where the company is today, you need to look at some history, and that takes us to the Nissan Motor Company, Ltd., which began operations in Japan in 1933.
Nearly four decades later, in 1970, the company formed a group named JATCO to manufacture transmissions. Today JATCO’s largest shareholder remains Nissan. Other partners include Mitsubishi and Suzuki. JATCO’s specialty is the CVT, which it began manufacturing about a decade ago. Demand has grown, and this compelled the company to increase production levels. Further, market need fostered the 2003 establishment of JATCO Mexico. While vibrantly independent, it still needs to report to the JATCO Japan offices. JATCO Group headquarters are located in Fuji City, and production plants are spread throughout Japan, Mexico and China. But this is an ever expanding organization, and the company recently decided to build a new plant in Thailand, scheduled to start production by mid-2013. JATCO also has offices and sales networks in France, Korea, and the United States. As a grouped enterprise, JATCO currently has nine major CVT production lines – five in Japan, two in Mexico and two more in China.
JATCO Mexico, with its two major production lines, is strongly focused on the CVT2 production for four-cylinder vehicles. Current plant capacity translates into 23,000 units per month for the global line five. The total output for JATCO Mexico per year comes to 700,000 units.
On a global level, JATCO supplies 48 percent of the total CVT volume of transmissions in the market. JATCO Mexico currently produces 13 percent of the total volume.
“We not only meet, but surpass, our clients’ desired level of quality and their requirements,” says Velazquez. On a number of accounts, the company’s transmissions do just that. “Those that produce the vehicles that use our transmissions seek to reduce fuel consumption levels. The transmissions we offer enable that to happen,” he adds, pointing out that the CVT2 transmissions allow up to a 10-percent reduction.
Further, JATCO Mexico’s transmissions help reduce toxic emissions that can foul the atmosphere. And there’s another benefit: comfort level for the driver. “With a traditional automatic transmission, the driver usually feels a change of speed—or shift shock—upon acceleration. That doesn’t happen with our transmission,” Velazquez explains.
To ensure quality, the company has sought and received ISO/TS 16949 certification (in 2007) and ISO 140001 certification (in 2010).
The plant is located next to the Nissan Mexicana plant, and this facilitates interaction between the two companies. The close proximity also fosters within its region solid training for the automotive industry, notes Velázquez: “The area has great academic infrastructure, with excellent training. This helps us guarantee high quality products.”
At its plant, JATCO Mexico die casts the aluminum housings for the CVT. It also has a production line for heat treatment, and gear and pulley machining, as well as assembly lines to put together the CVT products.
After the company’s product rolls off of the assembly line, the items are sent to both domestic and international destinations. JATCO Mexico sends transmissions to Nissan Mexicana, where the company supplies transmissions for the Nissan Sentra. It also supplies Nissan North America’s plants in Canton, Miss. And Smyrna, Tenn. For these plants, JATCO Mexico mainly sends transmissions for the four-cylinder Nissan Altima.
Another of JATCO Mexico’s clients is Chrysler. For this auto industry giant, the company supplies transmissions for the Jeep Compass, the Jeep Patriot, and the Dodge Caliber. The company also sends products to Renault, mainly for the Megane model. For Renault, JATCO Mexico supplies transmissions for four countries: France, Turkey, Spain, and Argentina. In each country, the name of the vehicle changes but the platform remains the same, notes Velazquez. JATCO Mexico also supplies transmissions for Nissan UK’s Quashqai.
Recently, the company has participated in an internal competition among the different plants that operate within the JATCO Group, which has monitored various production factors for all nine global lines. With this internal competition, a variety of factors come into play. These are carefully measured and include quality, jobs-per-hour, and efficiency. How is the JATCO Mexico plant holding up? It leads in all areas, answers Velazquez.
Beyond internal competition, JATCO Mexico is focused on becoming a low-cost transmissions manufacturer. The company aims to price its products far below what clients would need to pay for conventional transmissions. “The quality of labor has allowed us to be competitive,” notes Velazquez. “We wanted to make this commitment for our clients but also for ourselves, as we address market needs.”
Due to the rising demand among JATCO Mexico’s clients and the increased use of the CVT in the automotive market, the company has plans to expand its current production lines. Velazquez estimates that by the fiscal year of 2012/2013, modifications currently underway in the plant will be finished. Changes will allow the company to increase the production levels of CVT2 for four-cylinder vehicles.
For the global CVT2 production line number three, the company plans to reach capacity levels of 480,000 units per year. For the global production line number five, it will be able to manufacture 330,000 units each year. Together, the number of annual units produced is expected to rise from the current 700,000 units to potentially 810,000 units.
JATCO Mexico is currently expanding the production area for the global line number three. It plans to modify the production area for the global line number five in early 2012. Once this is accomplished, the plant will be able to significantly increase its CVT2 output production.
After its start as the first manufacturing plant for JATCO outside of Japan, JATCO Mexico became a leading player for the group at a global level. In the coming years, as it increases production levels, the company plans to take on the position of the leading manufacturing plant for all of JATCO. In doing so, JATCO Mexico will continue to deliver high quality products to automotive clients around the world.