🎂 Automotive Supply Chain Risk Digest #367

February 9 - 15, 2024, by Elm Analytics

7 Years Together: A Heartfelt Thank You

Dear Reader,

As we celebrate our 7th anniversary, we would like to express our sincere gratitude for your loyalty and support. It's been a remarkable trip for us in this automotive supply chain risk niche, but your support has fueled our journey.

We're excited to continue providing the valuable information you rely on. Your experiences and feedback are crucial to our community and continue to inform our direction. 

We are humbled when you recommend us to a friend or colleague or even click the heart icon (extra thanks to Mark, who is incredibly consistent!).

Thank you for being with us. Here's to more years of resilience and success together.

Warmly,
Nick Gaydos
Editor, Automotive Supply Chain Risk Digest

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Change In Management

Toyota is revamping Daihatsu's leadership and scaling back operations after a safety scandal, with new executives appointed to refocus on minicar production and ensure quality control.

Expanding

Stellantis has announced that it will grow its electric drive module production capacity by including production in Szentgotthard, Hungary, starting in late 2026. The facility, which currently builds ICE engines, will join the existing electric drive production facilities in Tremery-Metz, France, and Kokomo, Indiana.

Continental is expanding its Novi Sad plant in Serbia, which opened last year and produces vehicle interior components, by adding 1.5k new workers to the 323k sq ft facility.

Human Capital

On the flip side, Continental is slashing about 7.1k jobs (3.6% of its global workforce) to stay competitive amid the transition to EVs. The cuts include 5.4k administrative and 1.7k R&D positions, with 40% of the reductions impacting employees in Germany.

Industry Directions

NYTimes: How China Built BYD, Its Tesla Killer

Mergers, Ventures, Acquisitions

BorgWarner and BYD's FinDreams EV battery unit announced an 8-year agreement to license and localize the manufacturing of BYD's LPF Blade battery pack technology, IP, and manufacturing processes for the Americas, Europe, and select Asian Pacific locations.

JSW Group plans to invest $4.82B in setting up EV and battery manufacturing projects in Odisha, India, in collaboration with its Chinese joint venture partner, SAIC Motor.

Opening

Whew! Lots of new projects announced this week:

Hyundai's Metaplant, its new EV and battery complex in Ellabell, Georgia, is set to commence operations in October 2024, three months ahead of schedule $. While the earlier opening will make its EVs eligible for the $7.5k federal tax incentive sooner, other US plants will initially supply the batteries for its vehicles.

Doowon Climate Control America will build a new manufacturing facility for climate control systems in Metter, Georgia, supplying Kia and Hyundai beginning in 2026.

VW's Scout Motors has begun constructing its electric truck manufacturing hub in Blythewood, South Carolina, with a planned capacity of 200k vehicles/year.

Hanwha Advanced Materials will build a new 200k sq ft injection molded structures and interior facility near Tesla, Toyota, and GM in Georgetown, Texas.

Eaton is opening a 65k sq ft EV fuse assembly plant in Santiago de los Caballeros, Dominican Republic, with production starting in 2024.

Linamar is working against the clock to construct North America's first supplier-owned gigacasting plant $ in Welland, Ontario, crucial for manufacturing parts for an undisclosed automaker's forthcoming EV.

"If this [plant] doesn't successfully launch on time, the vehicle will not make the market on time…"
- Rick Borns, director of engineering.

The facility, which represents a significant investment and will employ mammoth diecasting machines for large aluminum parts, is poised to start operations in February 2025. Linamar's venture into gigacasting, a method promoted by Tesla for producing lightweight vehicle components, has garnered interest from various OEMs, indicating potential future collaborations.

BYD is conducting a feasibility study to explore establishing a manufacturing facility in Mexico to create an export hub to the US.BYD has been all in on global expansions, including a new plant in Brazil and a production base in Hungary.

The company's potential Mexican campus aligns with efforts to reduce export costs to the US and comply with the USMCA for tariff-free exports.

The decision also reflects a broader trend of Chinese automotive investments in Mexico, aiming to capitalize on the growing global EV market.

ZF has opened a new manufacturing plant in Oragadam, Tamil Nadu, marking its 19th in India. The facility, located on a 44-acre campus, will produce EV components, such as compressors and electronic braking systems.

Japan Advanced Semiconductor Manufacturing Inc., a joint venture led by TSMC with Toyota and Sony, will build a second plant in Kyushu $, Japan, starting production by the end of 2027.

Production Decrease

GM's Chevy Blazer EV sales remain on hold due to unresolved software issues, nearly two months after the company issued a "stop-sale" in December.

CEO Mary Barra emphasized 2024 as the "year of execution" for GM, focusing on overcoming these software challenges, resetting EV production, and relaunching Cruise.

The software problem also affects Chevrolet Colorado and GMC Canyon trucks, highlighting GM's broader struggles with new vehicle technology integration. Amidst these challenges, GM aims to launch several electric models this year, including the Equinox EV, Silverado RST EV, and GMC Denali EV pickup.

GM's commitment to refining its software development and validation processes is crucial as it seeks to leverage software as a significant revenue source while transitioning to electric vehicles.

Regulation

→ Volkswagen Group is rushing to replace an electronic component with US Customs impounding nearly 1k Audi, Bentley, and Porsche models.

The Chinese subcomponent, which violates anti-forced labor laws, is expected to be entirely replaced by the end of March.

VW has faced numerous challenges with its SAIC-VW joint venture's Xinjiang-based plant amid accusations of forced labor.

Russia's Automotive Technologies is reportedly assembling Citroen C5 Aircross models at the Kaluga plant in Russia, which Stellantis owns.

Even though Stellantis halted its activities in April 2022 following the invasion of Ukraine, the plant has managed to import at least 42 car kits produced by China's Dongfeng Motor Group.

The move shows Russia's growing reliance on China and Western companies' struggle to control their operations and brands in Russia.

Citroen models are still being sold in Russia through a scheme that allows parallel imports without the trademark owner's consent, indicating continued demand for foreign cars.

Supply Chain

S&P Global Mobility: BriefCASE: Navigating the Red Sea crisis, an automotive industry perspective