The threat from the 2019 novel coronavirus outbreak on Thursday closed in on the global auto industry, as Fiat Chrysler Automobiles NV warned that a European plant could shut down within two to four weeks if Chinese parts suppliers cannot get back to work.
The next several weeks will be critical for automakers. Parts made in China are used in millions of vehicles assembled elsewhere, and China’s Hubei Province, epicenter of the outbreak, is a major hub for vehicle parts production and shipments.
Industry experts have said that auto suppliers had built up a cushion of parts in inventory and in-transit ahead of the Lunar New Year holiday, but those would start to run out if Chinese parts factories cannot get back to work next week, or if flights to and from China remain limited.
Chinese auto parts and assembly plants have extended previously planned New Year’s shutdowns through Monday next week, but some have pushed the shutdowns out further.
“Almost everybody has some product where they are in trouble,” said Dan Hearsch, a managing director for the auto and industrial practice of consulting firm AlixPartners.
Fiat Chrysler could be forced to suspend production at a European assembly plant if parts do not begin to arrive within two to four weeks, chief executive officer Mike Manley said on Thursday, without identifying the plant or vehicles at risk.
South Korea’s Hyundai said that shortages of parts from China would force it to suspend production at its South Korean plants.
Other global automakers have not disclosed details about potential disruptions outside China, but have said that they are monitoring the risks.
Toyota operating officer Masayoshi Shirayanagi said that the automaker is “looking very closely at inventories of components” outside China.
GM has teams working around the clock to head off trouble, the automaker’s chief financial officer said.
Automakers are more likely than in the past to have backup sources of critical parts, AlixPartners consultant Hearsch said.
They and their major suppliers took steps after the deadly 2011 tsunami that crippled key auto parts makers in Japan to reduce the risk that a catastrophe at a single factory could shut down assembly lines, Hearsch added.
Flexible manufacturing equipment can also be reprogrammed or relocated to produce parts. When a fire at a Michigan supplier plant threatened production of Ford Motor Co’s high-profit pickup trucks, Ford moved rapidly to relocate production tools to a plant in Ontario.
Still, not all the production from China’s Hubei Province can be easily replaced or moved.
Hubei is one of 11 Chinese provinces that are responsible for more than two-thirds of vehicle production in China, IHS Markit said in a study last week.
If plants remain idle into next month, the production losses within China would become significant, amounting to more than 1.7 million vehicles of lost production during the first quarter, IHS projected.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”