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.