Elm Analytics - Automotive Supply Chain Risk Digest #302 - November 18 - 24, 2022
CHANGE IN MANAGEMENT
Continental has named Aruna Anand the CEO of its North America automotive division.
Volkswagen and SAIC will close one of their JV plants in China that produce manual transmissions in March 2023. The closure is attributed to the Chinese market's preference for automatic vehicles.
The shift to EVs, with fewer parts and required expertise in technology, is reshaping the Japanese auto industry. Analysts believe this shift will change its traditional keiretsu system and has outside private equity firms investing.
Stellantis will look to lowering EV manufacturing costs by manufacturing in India.
"So far, Europe is unable to make affordable EVs. So the big opportunity for India would be to be able to sell EV compact cars at an affordable price, protecting profitability." - CEO Carlos Tavares.
VW and IG Metall have agreed to a new contract, giving 125k German workers an 8.5% pay increase.
Mercedes and Bosch will pay nearly $6M to settle a lawsuit in Arizona regarding diesel advertising claims. Mercedes will pay $2.8M in consumer restitution, and $2.8M in penalties, while Bosch will pay $525,000 in fines.
MERGERS, VENTURES, ACQUISITIONS
Mazda will invest nearly $11B into electrifying its vehicle lineup. Senior managing executive officer Akira Koga said the investment would go towards research and development and be made with the automaker's partners.
Japan-based electric motor maker Nidec is investing $715M into a new e-axle plant in Mexico. The plant will supply e-axles to the North American market.
Hyundai supplier Ajin USA has announced that its subsidiary Joon Georgia will build a new $317M plant in Statesboro, Georgia. Hyundai is building a new plant in Ellabell, Georgia, and says that Joon's announcement is the "first of many" from its regional suppliers.
LG Chem has announced that it will invest $3.2B into a new EV battery cathode plant in Clarksville, Tennessee. Construction of the plant will begin in the first quarter of 2023, with production expected to start in the second half of 2025.
Toyota is cutting December vehicle production and suspending four production lines at three plants in Japan. The automaker blamed the cuts on "future risks, such as the shortage of semiconductors."
Russia has revived its Soviet-era Moskvich brand by working with China's JAC. The crossover, identical to JAC's JS4, is being produced at a plant previously run by Renault.
Ford recalled around 572K F-150s due to potentially defective windshield wiper motors that can suddenly stop working. Ford estimates that only 1% of the motors are flawed but will replace them all as part of the recall.
The company also recalled 634k Bronco Sport and Escape models over fire risks from cracked fuel injectors.
Tesla recalled nearly 30k Model X cars in the US due to an issue that may cause the front passenger airbag to deploy improperly.
They also recalled 321k Model 3 and Model Y vehicles due to an issue with the tail lights. An over-the-air software update will address both issues.
Goldman Sachs predicts US and European protectionist policies could drop dependence on China for EV batteries by 2030.
A rail strike on December 9 looms due to a 4th union voting down the September contract. With a daily nationwide impact of $2B, some call for congressional intervention.
Stellantis has several thousand ready-for-delivery vehicles stored at an abandoned French airfield. Bottlenecks in truck and rail capacity permit Only 800 of every 1100 cars produced per day in Sochaux to be shipped.