Volume 11 | Issue 2 | Year 2008

In a sprawling industrial complex 60 miles distance from Mexico City, a sleeping brand is stirring back to life. A former Mexican powerhouse, with a large market share in heavy trucks and buses both locally and in some places abroad, Dina has had a difficult history, full of celebrated peaks and debilitating setbacks. But after closing down for a restructuring in 2001, Dina is back in business.
Despite its troubled past, the company has many assets to exploit, including its 50 years of experience and its brand recognition, which is still strong to this day. Though its production line had been shuttered, the company’s engineers have been hard at work developing new technologies that will allow the company to compete in the world’s increasingly globalized market.

The company has consolidated and concentrated on bringing to market a small range of products in these early days of its rebirth. Dina will begin by manufacturing two buses for the local market, moving on to trucks and other vehicles as its operations expand. With its international connections still established, it won’t be long before Dina will reach for its former glory as a globally recognized brand.

Both locally and internationally, Dina’s story is the stuff of legend. The company was formed in 1951 with an investment of 75 million Mexican pesos, with the majority shareholder being the Mexican government. The idea was to form a local automotive company so that Mexico could produce trucks and buses and eliminate the need to import them. Not long after, the company signed a contract with Italian auto company Fiat to design an engine for a heavy truck.

The company continued through the ‘70s signing contracts and forming alliances with various other foreign companies. By then it was 100 percent owned by the state and Dina had practically a monopoly on certain segments of the heavy vehicle market, with vehicles like its “Dolphin” buses and its line of tractor trailers. In 1989, the company went through a dramatic change that would begin the see-saw characterizing the rest of Dina’s history.

In 1989, the federal government decided to sell off Dina. The company, which was now a holding company with a portfolio that included bus, truck, engine and plastics companies, was purchased by a Mexican investor named Raymundo Gomez Flores, who renamed the holding company Consorcio G.

“Up to that point, (the company) had remained a technology consortium,” said CEO Martin Melendez. But that was about to change, thanks to consolidation followed by a rapid series of investments and expansions of the company’s holdings and market share. The company went on a tear in the next few years, launching new products and introducing its “Navistar” motors to the market. In 1993, it offered its stock on both the New York and the Mexican stock exchanges.

That decade, the company began selling its products in more than 40 countries – from Argentina to Saudi Arabia to the United States – and in 1994 Dina acquired the assembly plant of Motor Coach Industries International (MCII), the leader in the U.S. and Canadian market if integrated bus manufacturers and sellers.

Dina made many other alliances and acquisitions at that time. But all was not well. The signing of NAFTA brought new and more agile competition to the Mexican market, and a catastrophic devaluation of the Mexican peso put even further strain on Dina’s dealings. What’s more, clashes between Dina and the government union that organized the company’s employees became ever tenser, even as Dina finished designs of new technology that would get the company financially back on track.

The union, Melendez said, was demanding a level of pay that Dina simply could not afford. Selling off part of its stake in MCII paid down some of the company’s increasing debt, but there was nothing for it: The company decided in 2001 to halt production for a time to consolidate, restructure, and come back with a new mission and new contracts.

Finally, Dina is ready to launch again. The company is coming to the market, initially, with two products. One is the HTQ-94F, a handsome medium-sized bus that weighs in at 15 tons and nine meters in length and comes in city and suburban versions. The other is the HTQ-104R, a full-size 17-ton bus that is over 10 meters long and designed for urban use and with a full list of options.

The buses are the first in Dina’s line of HTQ vehicles, which stand for High Technology and Quality. Developed along with several foreign companies, like BMW affiliate Design Works for example, Dina invested $70 million between 1996 and 1998 devising the new technology. HTQ vehicles are tough, quickly-made, and easy to fix, all characteristics that Dina hopes will give it an advantage over the foreign competition.

For one thing, the parts on HTQ vehicles are modular, meaning they are both easy to assemble and interchangeable. This will make it quicker and cheaper for Dina to produce replacement parts. It will also have implications for the assembly line and give Dina a competitive advantage as far as supply chain management: HTQ vehicles are assembled entirely – chassis and all – in a single assembly line. It’s something that’s not normally done in the automotive industry, and it gives Dina a degree of independence from international suppliers.

All of this is taking place at Dina’s sprawling, 40,000-squaremeter complex outside the city of Sahagun, Hidalgo state, only an hour’s drive from Mexico City. Dina has invested a total of $60 million to upgrade the factory to the most modern specifications, and the first fruit of its labor rolled off the assembly line this June.

Melendez said the factory is in a period of research and development, so for the moment it is producing one bus per day. Soon, however, the factory will ratchet production up to three buses daily, and within two to three years Melendez said 2,000 buses a day will be rolling off Dina’s assembly line.

Melendez said these buses are just the first stage of Dina’s resurrection. The second stage will begin next year, with the designing of a new line of cargo trucks, both conventional cab and cab-over. That line should be under production by the beginning of 2009, at which point Dina will start on its third stage, the design and production of long-distance motor coaches, or buses designed to travel long distances. By 2010, Melendez said, all of Dina’s products will be on the market.

That market will not be an easy one. Globalization means that every conceivable competitor is already in Mexico, and Dina will have to work hard to elbow out for itself a new piece of market share. The good thing is that Dina is coming to the market with some built-in advantages. For one thing, it has more than 50 years of experience making and selling trucks in Mexico, meaning the company is not really a newcomer. In fact, something like 200,000 Dina trucks are still on the road, meaning that the company holds an important asset in its brand recognition.

“It’s still a recognized company in the national and international markets for safe and profitable trucks,” Melendez said.

Being local also brings with it a certain experience and culture that a foreign company could never mimic. For example, Melendez said that the company has designed its vehicles following the assumption that they will be abused by drivers in Mexico and other developing countries, where “normally the user doesn’t respect the limits and conditions for which it’s designed.” Starting with that assumption, Dina is making its vehicles extra-rugged, both inside and out.

Also, Melendez said it’s a good time to launch on the Mexican market with newly-designed products. Concerns about pollution in Mexico and all over Latin America mean that local and federal governments will be looking to replace 10-year-old, smoke-belching buses with new ones, and Dina is planning on working on vehicles that will meet higher environmental standards. In doing so, Dina is joining a stampede of other foreign countries in that direction, but Melendez said Dina can compete.

Already it seems like Dina is meeting with some success. Melendez said the company is just now preparing to sign a contract with the government of Mexico City to supply it with 1,000 buses for use in the public transportation grid. Also, though it has been some time since Dina exported its vehicles abroad, Melendez said the company’s network is still in place and he expects foreign sales to line up quickly. Already, Melendez said, the company is looking at possibilities in Nicaragua and Venezuela.

“We’re competing in an open, global market where you can find all the European, American and Asian brands,” he said. “But we’re prepared based on our technology and the quality of our products to confront the opening.”

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