• AMT

International News from the Field: July 10, 2020

Actionable global business intelligence is vital to our members during these uncertain times. AMT’s Global Tech Centers will supply updated information from their regions regarding new opportunities as well as status reports on local manufacturing facilities that utilize your products and other relevant news. This is the fourth installment in the bi-weekly series.


Mexico

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • Mexico’s auto production and exports picked up steam in June compared to a month earlier. Production jumped nearly 11-fold in June to 238,946 units, up from 22,119 units in May. Year-on-year, production slipped 29.3% in June. Mexico exported 196,173 units in June, up 13 times versus the 15,088 units shipped in May. Still, exports were down 38.8% in June from a year earlier.

  • Mexico is one of the emerging countries most open to foreign direct investment, the world’s 15th largest FDI recipient. According to UNCTAD's 2020 World Investment Report, FDI inflows dropped down to $33 billion, from $35 billion a year earlier (minus 5%). The total stock of FDI is estimated at $628 billion in 2019. Investments mostly come from the United States, Spain, and Canada. The sectors receiving significant foreign investment are manufacturing (especially the automobile industry, representing 21% of FDI), electricity, water and gas supply finance, retail and wholesale trade, and financial services.

  • Jalisco state forecasts the arrival of a $400 million investment.

  • “The medical niche has surprised us by the number of projects that are being explored and some of them have been completed. Another is that of renewable energy, despite the latest developments at the federal level,” said the head of state´s industrial development agency. “They are aimed at having a strong presence in the electrical automotive industry because of the issue of internal combustion; we see that in the coming years, it will be out,” said the official, who stressed that some of the investments that will arrive this year are coming from China.

  • On July 2, Bombardier Recreational Products announced the first investment in Mexico in the new USMCA era: it will invest $136 million to build a plant for manufacturing four-wheel vehicles in Ciudad Juarez, Chihuahua.

  • Medical device production in Costa Rica amounted to $3.6 billion in 2019. 2020 has proven to be an even better year in production and exports. The growth for 2019 versus 2018 was 12% and the expectation for 2020 is to close the year with a higher figure. 

South and Central America

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • In late June, 40,634 manufacturing companies in Colombia had authorization to resume their operations, mainly in Bogota, Antioquia, and Valle de Cauda. This represents 26% of the total 155,638 companies in this sector.

Brazil

For more information, contact Achilles Arbex (aarbex@AMTonline.org)

  • Plans to privatize four big, state-owned companies within the next 90 days are made public by the minister for economic affairs.

  • Industrial production increased 7% in May, recording an 11.2% reduction in 2020 or 5.4% over the last 12 months. The capital goods segment increased 28.7% in May, despite this being the worst May recorded in five years.

  • The segment of trailers and equipment used in trucks increased production levels by 244%, which was triggered by restrained demand as companies were unable to fulfill orders last month.

  • Automotive sales have doubled in June in comparison to May.

  • Mercedes, Hyundai, VWCO, and GM have opened second shifts to supply demand.

  • Case New Holland is currently increasing production volumes to supply demand of machinery and equipment for basic sanitation programs launched by the government and the need to renew the fleet of equipment used in sugar cane, coffee, cotton, and grain production as levels remain high and export demand strong. 

  • Software developers, IT companies, and ecommerce businesses have been enjoying a very good moment in Brazil as sales numbers and revenue have reached high levels of demand. This is confirmed by GRV, the company who works with us on the implementation of MTConnect as a communication protocol, and who has been hiring since March to supply demand.

  • ABIMAQ, a Brazilian manufacturers’ association, has been promoting webinars to members needing to restructure business, working on merger and acquisitions, and developing plans and strategies to continue operating through challenging times due to reduced cashflow levels.

China

For more information, contact Fred Qian (fredqian@amtchina.org)

  • Speed: 600 kph! The Chinese high-speed Maglev Train, with proprietary intellectual property rights, completed its trial run successfully on June 21, 2020; prototype vehicles will be finished at the end of 2020.

  • CAAM, the China Association of Automobile Manufacturers, estimates that Chinese automobile sales will drop approximately 10-20% in 2020.

  • Tesla’s (Shanghai) EV Model 3 sales in May surpassed 10,000 units, enough to make it the bestseller among EV manufacturers in China’s market. Due to COVID-19 impacts on the supply chain, Tesla has expedited the progress of part localization, which will bring more investment opportunities to the industry’s chain.

  • WAIC 2020, the World Artificial Intelligence Conference, will be held from July 9-11 in Shanghai. Microsoft will present its themed seminar, AI for a Sustainable Future, on July 10.

  • China is expediting the actual use of autonomous vehicles in people’s daily life. New test roads are being added to designated areas in Shanghai, Hunan, and Beijing. The most recent development is that self-driving taxis became available in certain areas. This is a milestone in the application of intelligent connected vehicles (ICVs) and is also an attempt to bolster the large-scale commercial use of self-driving technologies. 

  • The Chinese PMI indicator for June 2020 is 50.9, continuing its streak of staying above 50.0 for the last four months during the COVID-19 pandemic.

  • As the first trade show in China since the outbreak of COVID-19, the China Machine Tool Exhibition, CME, kicked off in Shanghai on July 1 with nearly 1,500 manufacturers from home and abroad participating. 130,000 visitors attended the show from July 1-4, 2020, an increase of 12% over 2019.

  • China’s leading 3D printing and additive manufacturing trade show, TCT Asia, was held July 8-10 at the Shanghai New International Expo Center (SNIEC). Over 220 exhibitors from 23 countries were expected. https://www.tctasia.com.cn/en

Europe

For more information, contact Huber Sawicki (HSawicki@AMTonline.org)

  • On July 5, the Financial Times quoted the Capital Economics source, stating that the sharp economic contraction that has gripped major European economies since March began to ease in May and early June.

  • At the end of June, the designed-by-the-European-Commission indicator ESI, the Economic Sentiment Indicator, showed an increase from a previous record low to 75.7, with the largest recovery in the Netherlands, Spain, Italy and Germany. The ESI is a composite and scaled to a long-term mean of 100, based on structured replies from companies in 5 sectors of the economy.

  • The level of unemployment within the European Union in May modestly increased to 6.7%, or to 14.5 million people, up from 6.4% in March. The highest levels were in Spain, Greece, and Cyprus, and the lowest in Czechia, Poland, and the Netherlands. It is likely to increase with redundancies in the pipeline.

  • The slump in manufacturing continues to affect new business, and new, large contracts are rare. Judging by what is more visible, money is being put into autonomous boats (UK), drones (Turkey and Israel), helicopters and aircraft maintenance service contracts (several European countries), and toward production of electric vehicles (France, Czech Republic, Germany), potentially at the expense of the traditional automotive industry. R&D and innovation are especially focused upon. According to the World Economic Forum survey, an estimated 60% of global manufacturing will soon use connected device data for analysis, unprecedently driven by the IoT concept.

  • Noteworthy, therefore, is the success of Cerence Inc. It signed a global contract of $125 million with a yet-undisclosed European car manufacturer for its industry-leading voice and AI-based automotive assistants. Whether it is connected cars, autonomous driving, or e-vehicles, “Cerence is mapping the road ahead.”

  • The EU will spend 1.4 billion euros of its funds for large infrastructure projects in seven member states (Portugal, Spain, and Central Europe) on power supply, roads, railways, and city transport as well as waste disposal.

  • There is a continued push to develop the additive manufacturing sector in order to close the gaps in the traditional industrial supply chains. The issue here is the lack of skills in AM and the efforts to overcome it without delay.

  • For the first time in its history, Hannover Messe, in Hannover, Germany, will host a digital event focused on industrial transformation.  Hannover Messe Digital Days  will  begin on July 14, featuring keynotes from fields such as business, science, and politics, as well as panel discussions, live chats, networking, and innovation presentations. Everything revolves around the questions of how industrial transformation can succeed and which steps industry must take to recover quickly from the consequences of the shutdown.

India

For more information, contact Arun Mahajan (AMahajan@AMTonline.org)

  • In June, the Indian auto industry saw a sharp increase in MOM sales. However, the total June number (973,380) was down by 42.9% on a YOY basis. Tractor sales in June (47,570) were up by 12% YOY. 

  • Schindler plans to set up an escalator manufacturing line in their Pune-based manufacturing plant.

  • Daikin and Voltas are planning to set up their air-conditioner manufacturing plant in southern India.

  • Bombardier Transportation India will manufacture and supply 200 metro rail coaches for Agra and Kanpur city metro projects. The total value of the project is $30 million.

  • Larsen & Tubro (L&T) defense unit is setting up a machining line to supply frame and assembly parts to Boeing. 

  • Daimler India Commercial Vehicles is planning to invest $30 million for capacity expansion of their Oragadam plant.

  • Kia Motors will invest an additional $54 million for capacity expansion at their Andhra Pradesh-based manufacturing plant.

  • IPhone manufacturer Winstron will invest $165 million to increase capacity at their Bangalore-based plant.

Other Asian Countries

For more information, contact Li Xingbin (lixingbin@AMTchina.org)

Across East and Southeast Asia, governments have launched huge stimulus packages with most of the measures aimed at protecting workers, supporting small- and medium-sized enterprises, and developing a COVID-19 vaccine.

  • Japan: Japan has launched one of the world's largest stimulus packages, which, at 234 trillion yen ($2.19 trillion), is equivalent to about 40% of the country's GDP. The package will finance direct cash transfers to citizens, subsidies for small- and medium-sized enterprises, grants for medical workers, vaccine development, and emergency spending.

  • Singapore: Singapore has allocated SG$92.9 billion ($66.6 billion), or about 20% of the country’s GDP, to help the economy recover. The package includes: wage subsidies for local companies; waiving foreign-worker levies; tax rebates; a job support plan; and a contingency fund.

  • South Korea: South Korea has introduced a 270 trillion won ($222.6 billion) stimulus package, equivalent to about 14% of the country's GDP. The budget will be used for benefits to companies maintaining their workforce, subsidies for freelance and contract workers, loans to small- and medium-sized enterprises, and developing a vaccine against the virus.

  • Thailand: On June 16, the Thai government approved a 22.4 billion baht ($721 million) stimulus package aimed at encouraging domestic tourism. The travel and tourism industry is one of the country's major sources of foreign revenue but is also one of the sectors worst-affected by the pandemic. The package will fund holiday travel for the country's healthcare workers and subsidies for local tourists. It comes on top of a stimulus of more than 2 trillion baht allocated by the government to help businesses and individuals affected by the outbreak.