Automotive Supply Chain Risk Digest #428
April 11 - 17, 2025, by Elm Analytics
Contents
BANKRUPTCY
Dealers protest at gate of Neta Auto
CLOSING
Tribar closes HQ after acquisition
INDUSTRY DIRECTIONS
Magna warns tariffs mirror 2008, COVID
LITIGATION
JAC sues Pangeo over tariff dispute
MERGERS, VENTURES, ACQUISITIONS
ABC acquires TI Fluid for $2.2B
PRODUCTION DECREASE
S&P downgrades forecast due to tariffs
Nissan cuts Rogue output in Japan
PRODUCTION INCREASE
Nissan ramps up underutilized US capacity
REGULATION
Trump hints at vague auto industry relief
Canada offers conditional exemptions
China hikes tariffs to 125%
China suspends rare earth magnet exports
Volvo needs two years to shift output
Brazil warns US on tariff strategy
China delays BYD, Geely foreign plants
RELOCATING
Honda moves Civic hybrid to Indiana
RISK ANALYTICS
Tariffs threaten Ford, GM supply chains
Trade policy insights for auto-sector firms
Multinationals advised on tariff pause
SHUTDOWN
Hyundai pauses EV production in Ulsan
Mazda halts CX-50 for Canada market
Bankruptcy
Neta Auto is facing a deepening crisis as dealers protest at the gates of its Tongxiang factory in China, demanding repayment for undelivered vehicles and compensation for mounting losses amid halted production, mass layoffs, and collapsing domestic sales.
With only 487 cars sold in early 2025, the company is shifting focus to Thailand, where it has secured a $215M credit line and plans to begin local production. The situation highlights the mounting financial strain on smaller EV startups in China and the growing risks for partners, such as dealers and suppliers.
Closing
Tribar Technologies, a company that supplies automotive trim parts like injection-molded components, chrome grilles, and multi-shot moldings, is closing its headquarters and two production sites in Wixom, Michigan.
This closure will result in the loss of 188 jobs. Following a recent acquisition, the company plans to consolidate its operations at its two remaining plants in Howell, Michigan, although the identity of the buyer has not been disclosed.
Tribar has faced criticism due to a 2022 chemical spill involving hexavalent chromium, a known carcinogen, which contaminated the local water supply. The company pleaded guilty to violating the Clean Water Act as a result of this incident.
Industry Directions
At an Automotive Press Association event, Magna International CEO Swamy Kotagiri compared the impact of current US tariffs $ on the auto industry to a combination of the 2008 financial crisis, COVID-19, and the microchip shortage, citing widespread demand destruction, rising costs, and severe supply chain disruption.
He warned that announced plant shutdowns are "just the beginning" and said relocating production to the US would be prohibitively expensive and slow, despite pressure to localize due to tariffs.
Magna, which had $42.8B in 2023 sales, also faces challenges from slower-than-expected EV adoption, resulting in supply chain inefficiencies and overcapacity. Kotagiri called for clearer trade policy, better supplier-OEM partnerships, and new contract pricing models to manage volatility.
The warning from North America's largest supplier stresses how trade policy uncertainty and misaligned EV investments are compounding risks across the automotive supply chain.
Litigation
JAC Products, a Michigan supplier to GM, has sued Chinese Tier-2 supplier Pangeo for refusing to ship exterior trim parts unless JAC paid $56k in tariffs, which they claim were to be shared per their agreement.
The lawsuit highlights the risk of production shutdowns for GM due to missed deliveries. Although the case may be settling, it highlights the strain on supply chains caused by tariffs, particularly as automakers like General Motors continue to source from China, despite previous shifts towards Mexico and Canada.
This case mirrors other disputes, such as Nexteer's with South Korea's Primax, indicating systemic issues in tariff cost allocation $. Daniel Rustmann, cochair of automotive law at Butzel, noted that this might be the tip of the iceberg, as even minor component issues can lead to significant production risks in the auto supply chain.
Mergers, Ventures, Acquisitions
Canada's ABC Technologies has acquired the UK's TI Fluid Systems for over $2.2B, forming TI Automotive, a Tier-1 supplier with $5.4B in revenue and operations in 26 countries. Headquartered in Auburn Hills, Michigan, the combined company will offer fuel, brake, and thermal management systems for gas and electric vehicles and will be led by ABC CEO Terry Campbell.
Production Decrease
S&P Global: Auto Tariffs Lead to Major Forecast Downgrades
Nissan will cut Rogue SUV production by 13k units at its Kyushu, Japan plant from May to July due to new US tariffs, marking one of the first export reductions among automakers.
Production Increase
For Nissan, years of declining US market share and a post-COVID slump have left its Smyrna, Tennessee, and Canton, Mississippi, plants operating at half capacity, which could now be an advantage.
This summer, Nissan will maintain a second shift on the Rogue line in Smyrna and focus on domestic production of key models—Rogue, Pathfinder, Murano, and Frontier—that made up 48% of US sales last year.
Nissan's underutilized US capacity may allow quick production adjustments $ as tariffs alter supply chains.
Regulation
US President Trump hinted at possible relief from auto tariffs, but gave no specifics, leaving automakers uncertain amid widespread production disruptions and rising costs.
The lack of clarity is hindering investment and threatening suppliers, with industry leaders warning that policy instability could result in long-term damage to the North American supply chain.
Canada will exempt automakers from retaliatory tariffs if they continue to produce vehicles domestically and import US-assembled vehicles that meet CUSMA requirements.
Finance Minister François-Philippe Champagne announced that these import allowances will be reduced if there is a decline in production or investment in Canada. Additionally, a 6-month tariff holiday will help manufacturers adjust their supply chains.
Prime Minister Mark Carney criticized US President Trump's tariffs as disruptive to North America's integrated auto sector, while automakers like Honda reaffirmed their commitment to Canadian production.
China increased tariffs on US goods to 125% in response to the Trump administration's trade measures, which raised US duties on Chinese imports to 145%.
With negotiations stalled, both sides appear entrenched, risking prolonged supply chain disruptions and economic fallout for industries heavily reliant on cross-border trade.
In addition to the newly announced retaliatory tariffs, China has also suspended exports of rare earth materials, which are crucial to automotive systems, posing a serious threat to global EV and ICE vehicle production.
These magnets, used in electric motors, steering, and powertrain components, are almost entirely sourced from China, leaving automakers vulnerable to supply disruptions amid escalating trade tensions.
Volvo CEO Hakan Samuelsson says it could take up to two years to shift more production to the US to avoid tariffs on its European and Chinese-made vehicles.
Chinese authorities have delayed approval for BYD's planned EV plant in Mexico and Geely's proposed production with Renault in Brazil, citing concerns over potential technology transfer amid growing geopolitical and tariff-related uncertainty.
While Geely claims operations in Brazil are proceeding, official authorization from both the Chinese and Brazilian governments is still pending.
The delays highlight Beijing's tightening control over outbound automotive investments as it reassesses the strategic risks of sharing domestic know-how abroad amid rapidly shifting trade policies.
Relocating
Honda Motor Co will relocate the production of its US-bound five-door Civic hybrid from Japan to Indiana, with manufacturing of the model at the Yorii factory expected to cease by June or July.
Risk Analytics
Ford and GM face billions in added costs $ from new US tariffs, with Ford at risk of losing 6% of its revenue due to its dependence on imported parts, including alternators and wheels from Mexico and tires from South Korea, despite assembling 80% of its vehicles in the US.
GM, which imports about half its US-sold pickups and a large number of small SUVs, could be hit harder overall, especially as it also faces tariffs on assembled vehicles.
Ford’s Super Duty trucks rely on engines shipped in from Mexico, and wiring harnesses—labor-intensive and sourced from Mexico and Central America—highlight the difficulty of reshoring component production.
GM has informed suppliers that it will not absorb tariff-related cost increases, prompting legal tension and increasing the risk of halted shipments.
Smaller US suppliers, such as UGN, which recently faced a 47% tariff on an aluminum part from China, are particularly vulnerable, with many warning that customer production cuts could quickly ripple through their operations.
Foley: What Every Auto-Sector Company Should Know About …
Shutdown
Hyundai will pause production of the Ioniq 5 and Kona EVs at its Ulsan plant in South Korea from April 24 to 30 due to declining demand and the introduction of new 25% US import tariffs. The move follows subsidy cuts as Hyundai works to maintain pricing stability in the US market.
Due to US-Canada tariff tensions, Mazda will stop production of the CX-50 $ for the Canadian market at its Huntsville, Alabama, plant starting May 12, which accounted for 15% of Mazda Canada's 2024 sales. The company will rely on existing inventory while awaiting a resolution, illustrating the impact of tariffs on vehicle supply in Canada.
