Elm Analytics - Automotive Supply Chain Risk Digest #41 - November 17 - 21, 2017
Ford may join GM in leaving less profitable South American markets.
MERGERS, VENTURES, ACQUISITIONS
Daimler and BAIC plan to invest $755m in China (out of $11.8b globally) to produce electric vehicles and batteries. The electric vehicles, under the EQ brand, will be produced to meet China's strict production quotas.
Just last week, VW had a similar announcement of €10b earmarked for Chinese electric vehicles.
PSA has partnered with Huawei to develop a telematics platform. The system will be released in 2018.
Uber will buy 24,000 Volvo SUVs that will become a fleet of driverless cars. Uber will provide their own sensors and software to permit pilot-less driving.
Key Safety Systems will pay $1.6b to buy most of Takata's assets in a deal expected to close early next year. Key will get all of Takata's assets except for those making replacement airbag inflators; Takata will run those operations until they close.
VW will expand its Zwickau, Germany to be the primary EV assembly plant for European markets. This expansion is part of a larger reorganization to shift focus to the EV market.
Ford will expand its factory in Valencia, Spain, to produce the Kuga SUV. The Valencia facility is one of Ford's largest plants, globally.
Indian automaker Mahindra has opened a new $230m assembly plant near Detroit in Auburn Hills, Michigan. It is the first new vehicle assembly plant to open in the Detroit area in 25 years.
Summit Plastic Molding has broken ground on a new facility in Bruce Township, Michigan. In addition to manufacturing capabilities, the facility will also serve as the company's new headquarters.
A joint venture between Hella and Beijing Hainachuan Automotive Parts has opened a new lighting systems plant near Tianjin, China. The plant currently employs 100 and has a production capacity of 1.2m headlamps and car body lights per year.
Automakers targeting the Chinese EV market are at risk with huge inventories. Strong urban incentives are driving sales now, but any reduction in subsidies could kill demand. What would happen with the excess production capacity?
Chancellor Philip Hammond says that the UK is aiming to have "fully driverless cars" on the road by 2021.
Instead of submitting counterproposals when negotiations resume next Monday, Canada and Mexico will instead offer rebuttals and ask many technical questions regarding U.S. demands for stricter NAFTA automotive content rules. A Mexican auto industry rep described the U.S. demands as "insane", while Canadian officials say that the demands would actually hurt the U.S.