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While the world slows down globalization, the automotive industry is struggling to decide where to produce
Long used to moving cars around the world, automakers are analyzing a reorganization of their manufacturing activity to avoid the rates. . "Let me be clear," said Oliver Blume, Porsche CEO and Production Manager at Volkswagen Group. "Where it is reasonable to produce, we will do it without hesitation," he added
as the European Union threatened to retaliate against US products for 300 billion US dollars. They arrived after similar warnings from General Motors regarding potential tariff changes
"The sad truth is that if rates are set, production will move, "said Arndt Ellinghost, automotive analyst at Evercore ISI. "If nationalistic trends continue, the inevitable result will be more production where the car is sold because it is the only way to avoid higher fares."
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The VW Group, with 122 factories around the world, has "the flexibility and ability to adapt to changing needs and requirements," he adds.
Harley-Davidson becomes the first automobile group to move its production last week, as it will relocate its motorcycle factory in the United States
This measure has angered President Donald Trump, who considered it "unacceptable ".
Harley, as suggested by Blume's comments, is probably not the last group to modify the cast. Geographical location of its factories as the survival of many national automobile factories depends on exports: international sales account for 80% of British production, 82% of Mexican production and 78% of German production.
Half of the cars sold in the United States are manufactured abroad, being the main importers of Mexico, Japan and Europe, while nearly one in five vehicles manufactured in North America is exported.
"Few industries have benefited as much from globalization as from automotive production" commented Max Warburton, an analyst at Bernstein. "The industry depends on the export of cars and auto parts , "he said.
Harley's measure, with fears raised at GM weekend, BMW and Hyundai, and the Brussels retaliatory warning against EE .US. They point out how The threads of this interconnected world are about to be undone.
Brussels has presented a detailed response to the US threat to set 25% tariffs on imported cars. In the same warning warned that EU and other major economies are "likely" to apply countermeasures against "a significant volume of trade", which could affect US products by $ 294 billion, accounting for 19% of the country's recorded exports. 2017.
This type of action is likely to encourage the auto industry to accelerate its transition to regional production.
About two-thirds of Toyota's sold in each region are manufactured within their borders, being North America, Europe or Japan. "To a certain extent, automakers already manufacture vehicles in regional factories," said Ian Henry, director of the British group AutoAnalysis. "If you look at Toyota, they produce the base vehicle for Europe in Europe, and for Japan in Japan."
VW produces 50% of its cars in the markets where it sells them, including four different factories producing the Golf. "Fares are just one factor among others in deciding where to produce our cars," said Mr. Blume, also director of production at VW. "The different needs of consumers and the different local requirements, the shorter forms of transport and, consequently, the lower transport costs are also important factors," he added.
Ian Robertson, who resigned As director of BMW last weekend, he said: "We have a very simple philosophy, we always have a situation where production plants are ideally close to our consumers. "
"We have 30 factories Around the world, this is partly due to regulatory problems, but this is largely due to being close to consumers."
The Company has built its huge SUV truck plant in Spartanburg, South Carolina USA was the biggest BMW market.Today, the factory is the world's leading X5 vehicle export, # 39; one of the products that leave more room for the company.
From here two years, BMW is expected to locate X5 production in China for this market, while the company prides itself on its systems Flexible Industrials That Allow It to Manufacture Different Vehicles in Its Plants.
Changes in Manufacturing Systems That Make It Possible to Make Totally Different Cars on the Same Production Line Could Reduce Costs in Moving Production Between Continents .
The fab Flexibility is becoming more and more common throughout the industry, which will surely accelerate with the production of more electric cars.
In the past, 150,000 units had to be guaranteed. car to justify production in a factory, now there can be two small SUVs and a compact car on the same platform, "said Ellinghorst. Evercore. "This allows more and more to make the places more flexible."
For those who can move, the decision to green the transfer of production depends on whether the current batch of commercial threats is a passing incident that will evaporate when Trump leaves office or whether it will be the new normal in a world that turns its back on a trade without borders.
"Putting a new plant in a new place is a long-term decision," he said. Jeff Schuster, President of Global Forecasting at LMC Automotive. "Production transfers will really depend on the duration of the trade war."
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