Carmakers quietly cut ties with China in supply chain shake-up

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Over the past 20 years, China has risen from obscurity to become a global leader in the car parts industry. Its growth was fuelled by European and American carmakers that farmed out the production of an increasing number of their components to China to save costs and establish links with the world’s largest car market. But international groups have now launched a quiet yet concerted effort to cut their reliance on China’s sprawling network of components makers, according to industry executives and supply chain experts.

China is “not the only one and not even the best”, he added, with “plenty of options” across India, Mexico, and parts of north Africa and Asia.

GM said: “Most of the parts we use in North America are already sourced in North America, and supply chain challenges over the past few years have reinforced the value of the resilience of our sourcing.”
 
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I was the middle level idiot pre-2002 when the push was on to move to China.

"It will be cheaper" they said.

You know, I actually had numbers that said, pretty much a wash (for our products) "It will be cheaper" they said.

You know why? Taxes, costs of goods. If you use Hong Kong or other as a middle man, and you own the middle man........see if you can figure out the why and the $. You could, theoretically make your reported COGS whatever you want. This doesn't even take into account the true cost of quality.

Good times in a way.
 
Good article. This does miss part of the sourcing equation though. Sure, OEMs are asking/sourcing tier 1s to manufacture in non China locations, but a ton of the tier 2 and tier 3 manufacturing especially on the electronics/electrification side of the automotive industry is still in China (unfortunately). For quite a few things, manufacturing anywhere but China bumps up the prices significantly as things stand, which the tier 1s and the OEMs balk at.

But things certainly seem to be changing - Ford, GM, Nissan (afaik) have been asking for more clarity of the tier 2 location from their critical tier 1s and asking for dual sourcing of suppliers to reduce reliance on one country (China).
 
I was the middle level idiot pre-2002 when the push was on to move to China.

"It will be cheaper" they said.

You know, I actually had numbers that said, pretty much a wash (for our products) "It will be cheaper" they said.

You know why? Taxes, costs of goods. If you use Hong Kong or other as a middle man, and you own the middle man........see if you can figure out the why and the $. You could, theoretically make your reported COGS whatever you want. This doesn't even take into account the true cost of quality.

Good times in a way.
Flavour of the month (decade?) remember contracting out employees rage in the 90's, now the companies are crying 'cause they thought they could just hire the skilled trades as needed instead of investing in old practices of training. Now everyone wants an almost nonexistent commodity.
 
I had to laugh at this. A lot of dealer parts I get in the body shop from GM say made in China
I wonder if the person quoted chose their words very carefully. Perhaps "sourced" in North America means they buy from a supplier who distributes from a warehouse in North America, but produces elsewhere? Otherwise, why not use the word "manufactured" in place of "sourced"?
 
All I can say is it's long overdue. Other imanufacturing ndustries are slowly figuring this out as well.

NEVER put all your eggs in one basket; diversify yourself. That's smart advice regardless if we're talking a single person, small family, large corportation, or a nation.
I was scheduled for MRI with contrast at the hospital a few months ago. Before the test I was informed "we are so sorry but we have no contrast due to supply chain issues from China!" Of course being shocked I did some reading. I looked into some of this stuff and even more upset to realize a vast majority of medicines are being made there and sent here. Where does it end?
 
...Somebody should be held accountable for this stupidity.

Those people that made that decision will be high up in the new American Peoples Republic. Like in that TV show The Man in the High Castle.

Back to the subject. I was surprised Honda Powersports outsources their oil filter production to China now when I bought my last one.
 
I am finding more and more products at the dollar stores coming from countries other than China. Including the US and Canada as well as Mexico. Viet Nam, Peru, Egypt...

The 13" tires purchased for the Valiant in November were made in Turkey. The 14" Starfires for the ION I bought in June were made by Cooper in the US. The last ones for both IIRC were Chinese.
 
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