Elm Analytics - Automotive Supply Chain Risk Digest #55 - February 23 - March 1, 2018
CHANGE IN MANAGEMENT
Nobuaki Katoh is stepping down as chairman of Denso.
China's new European ventures have created a tangled web of competitors that are connected through partnerships.
The Economist special report: "Reinventing wheels"
Three ways for suppliers to innovate:
1. Buy or partner with new companies.
2. Focus on the product offering.
3. Work closely with clients to tackle new needs.
Financial Times reported that FCA will end production of diesel passenger cars by 2022.
Report from Navigant Research:
Assessment of Strategy and Execution for 19 Companies Developing Automated Driving Systems
Being late to the EV game, losing public trust over emissions scandals and a mechanical to electronic centered workforce transition put German automakers in a difficult position.
MERGERS, VENTURES, ACQUISITIONS
Geely founder Li Shufu disclosed that he is the top shareholder of Daimler AG. Reportedly rebuffed on a 5% stake last fall, Li purchased shares on the market, surprising Daimler. Geely has said that it expects to benefit from cooperation with Daimler on new technologies.
Denso, Toyota, AT&T, and Intel partnered with others to launch the Automotive Edge Computing Consortium (AECC). The group intends to collaborate on standards and digital infrastructure to support automotive big data.
Mahindra has partnered with LG Chem to develop a Li-ion battery for the Indian market.
The newly formed Automotive Technology Leadership Group aims to minimize changes to current fuel economy standards. The group consists of the Advanced Engine Systems Institute, Motor & Equipment Manufacturers Association, the Manufacturers of Emission Controls Association, and the Aluminum Association.
China's Yunnan Aluminium will enter a joint venture with Israel's Phinergy to make aluminum-air batteries. The company will be based in Kunming, in China's southwestern Yunnan province.
Denso will add four new production lines to its Athens, Tennessee facility. The plant produces fuel pumps and gasoline injectors.
Grupo Antolin is expanding its plant in Shelby Township, Michigan. The facility produces automotive headliners for Dodge vehicles.
BMW will build a new plant in Kaliningrad, Russia. The facility is expected to be completed in 2021.
ArcelorMittal has opened a 313k sf plant in Detroit, Michigan. The facility produces high-strength steel blanks for the Acura RDX CUV and FCA's Ram pickup.
A German federal court ruled that Stuttgart and Dusseldorf could ban diesel vehicles to reduce pollution. This clears the path for other cities to do the same. The auto industry could spend billions upgrading or replacing millions of cars.
The Ohio Valley is watching how the Trump Administration moves forward with tariffs on steel and aluminum. Balancing the region's potential winners and losers is not an easy decision.
President Trump said that he will impose heavy tariffs on imported steel and aluminum next week. Many automotive manufacturers are in opposition, in fear of increased material costs.
The auto industry may need to revisit metrics and goals as it moves toward the future. Adopting digital KPIs may help measuring the effectiveness of connectivity and mobility solutions.
Automotive supplier's roles have evolved. OEMs now depend on Tier-0.5 suppliers as irreplaceable strategic partners.
China continues to progress on its Belt and Road initiative. Attracting large investments, the modern day economic "Silk Road" intends to connect China to Southeast and Central Asia.
Hard to ship, heavy batteries will be only one of many concerns in logistics in coming supply chains.