Carmakers Worldwide Quietly Cut Ties With China In Supply Chain Shake-Up
According to industry experts and supply chain specialists, international groups have now undertaken a stealthy but persistent attempt to minimise their reliance on China's massive network of component makers.
"There is a large-scale reassessment of logistical operations [across the industry]," Ted Cannis, a senior executive at Ford, explained. "The supply chain will be the focal point of this decade."
Two developments triggered the relocation. The first source of uncertainty is China's zero Covid-19 policy, which requires plants to close on short notice.
"The longer the pandemic lasts, the more uncertainty there is," Volvo Car CEO Jim Rowan said earlier this year, when the Geely-backed automaker announced it would increase its usage of non-Chinese components.
The second, though, is a longer-term concern of a wider political decoupling in the event of a collapse in China's relations with the international community, comparable to Russia, which may jeopardise commerce.
Mercedes-Benz, BMW, and notably Volkswagen face higher supply chain vulnerabilities.
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