Issue link: https://iconnect007.uberflip.com/i/1544155
30 SMT007 MAGAZINE I APRIL 2026 That certainly changes the dynamics of quoting, pricing, and working with the customers. Is Mexico still seeing strong demand for wire harnesses? Another situation we're facing is that the production of automo- biles is going down. If automo- tive production is down, then the manufacture of wire harnesses is as well. Mexico is still a good target for wire harnesses, because the process is very manual. The OEMs are trying to design the wire harness to be more automated, but we cannot control that right now. Normally, that would be an opportunity to cre- ate a more varied portfolio of businesses, but you can't do that very well, given the tariffs and domestic events. Exactly. Since the OEMs are not producing enough cars, especially electric cars, which is soft right now, many are moving back to hybrid or regular cars. Can they adapt and pull in some new diversified business, or do they just have to weather the storm? They're adapting, but some companies are moving out of Mexico as well. They're going to Nicaragua and Honduras, where labor is cheaper than in Mexico. That makes for a completely different kind of challenge. Can they create a more robust digital manufacturing flow, and are Mexican companies finding automation to be useful? They are going more to the automation process because this is the only way that they can save on labor, have higher quality, and be more productive and competitive. Then they'll have opportunities to move to other areas as well. When they automate, they'll have more room for manufacturing. What is the outlook for wire har- ness and Mexico? In 2024, wire harness production for automotive was more than $18 billion. This past year, we had approximately the same, but we're still waiting for the report. I think we'll see a decline of between 7 and 9.5% compared with 2024. How will the wire harness industry respond to these changes? The OEMs right now are experiencing a down cycle in their production. Sooner or later, it will come up again. That's when the wire harness industry will pick up. For Tier 1s, they have to be ready for big production with automation, and with labor that works with the automation. It is often these moments in an industry when manufacturers can pause and use the freed-up resources to make processes more efficient. When things pick back up, they're even more efficient, producing higher quality, making use of more automation. They have to invest in automation. It's not cheap, but it costs less now than it will later. This is why every company that I'm aware of is looking to automate. Jesus, thank you. Good to speak with you, Nolan. SMT007 J esus D uar te