Focused on supplier risk issues for business leaders

Reports Say China’s Trade Violations Threaten Loss of More Than 400,000 Jobs in US Auto Supply Chain

February 08, 2012 | No Comments →

Any recovery currently underway in the US auto industry could be completely undermined by China’s illegal trading practices, according to the Alliance for American Manufacturing (AAM), a non-profit, non-partisan partnership of leading manufacturers and the United Steelworkers.

In a press release issued last week, the AAM says that more than 400,000 jobs in the US auto supply chain have been lost since 2000 and another 1.6 million US jobs are at risk unless China’s illegal trading practices are curtailed. These forecasts are derived from data in three separate reports: (more…)

PwC Forecasts Positive 2012 for Global Automotive Industry

January 09, 2012 | No Comments →

The global automotive industry is poised for continued growth in 2012, provided the European Union gets a handle on the debt crisis there.

In an announcement last week, PwC’s automotive analyst group, Autofacts, said that it expects 2012 global light vehicle assembly will exceed 79 million units, an increase of 6.8 percent from 2011’s total.

According to Autofacts, there are many factors contributing to the positive outlook. For instance:

  • Local demand in the BRIC marketplace is on the rise. Monetary tightening and other policy shifts in Brazil, India and China caused slower growth in 2011. But, as PwC points out, inflationary fears in these markets are subsiding –prompting correspondingly looser monetary policy –and these markets could be poised for substantial growth once again. Russia is positioned for another year of strong local demand. Autofacts forecasts BRIC growth is likely to reach double digits (12 percent) in 2012 following only five percent growth in 2011. (more…)

Toyota Creating a More Resilient Supply Chain

September 09, 2011 | No Comments →

Toyota Motor Corp is revamping its supply chain, so that it can recover within two weeks after a massive earthquake like the one that devastated Japan this spring.

The March 11 earthquake and tsunami forced Toyota and other Japanese automakers to suspend much of their production for months. Even today, some parts of the supply chain have not been fully restored.

But now, Toyota is busy establishing a buffer against supply chain risks, Reuters reports.

According to the article, the company is focusing its efforts on three main areas: (more…)

PRTM Global Study Finds Stunning Recovery for European and North American Auto Suppliers

August 22, 2011 | No Comments →

To paraphrase an old adage, it appears that sometimes, whatever goes down must eventually come up.

Recently released results from PRTM’s annual auto supply study show that –after experiencing the largest downturn in history –worldwide automobile sales will likely hit a new record in 2011, driven by China’s relentless growth and the US recovery.

Sure, most auto suppliers endured a bumpy road during the past two years.  But the study suggests that European and North American auto suppliers are rebounding with what PRTM calls a “stunning, high-speed recovery.” European and North American auto suppliers increased EBITDA from 2009 to 2010 by 76 percent and 68 percent, respectively, while at the same time, North American suppliers emerged as the most likely global consolidators in 2011.

According to the PRTM study: (more…)

A.T. Kearney: US Auto Sales Volumes Will Trend Back to Historical Levels by 2013

May 23, 2011 | No Comments →

It looks as though the tide is turning for the automotive industry.

A new study released last week by A.T. Kearney paints a rosy picture for the future, forecasting:

  • 13.2 million new autos will be sold in the US this year and
  • an upward trend toward pre-recession levels of about 16 million units by 2013.

According to the study, over the past four years, total new and used pent-up demand has accumulated to 32 million units, of which more than nine million will materialize in the new vehicle market over the next five to seven years. The remaining 23 million units will sell in the used-car market.
But, as A.T. Kearney is quick to point out, there are a handful of significant variables that could, potentially, change these projections. This list includes:

  • overall economic growth
  • credit availability (The recession created 15 million “new sub-prime consumers,” of which approximately 530,000 customers would be locked out of the new vehicle market without help from auto lenders.)
  • consumer prices
  • consumer confidence
  • parts shortages in the aftermath of the earthquake and tsunami in Japan

What can OEMs and suppliers do to prepare for the anticipated upswing in sales –even as they accept the possibility of market volatility? A.T. Kearney suggests that OEMs and suppliers: (more…)