• AMT

International News from the Field: July 23, 2020

Updated: Aug 6

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 fifth installment in the bi-weekly series.


Mexico and Latin America

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

  • Mexico’s auto production and exports picked up steam in June from a month earlier but were down sharply versus a year earlier. Production jumped nearly 11-fold in June to 238,946 units, from 22,119 units in May. Year-over-year, production slipped 29.3% in June.

  • Yazaki, a Japanese automotive company, will invest $3 million in a new design center in Chihuahua, which will employ 27 people.

  • Toyoda Gosei invested $31 million in a new plant located in San Luis Potosi which will generate over 900 jobs. It will produce automotive seats for various OEMs, such as, Toyota, Nissan, Ford, and Honda.

  • France’s Safran, the world’s third largest aerospace supplier, has begun building a new factory in the state of Chihuahua.

  • NIDEC will manufacture electric car engines with new investments in Mexico.

  • Stringent content and wage rules under the new North American trade deal have forced hundreds of Japanese auto suppliers and material makers operating in the region to reevaluate supply chains, including whether to base future production in the U.S. or in Mexico.


Argentina

  • GM (Chevrolet) will start manufacturing the new Tracker in 2021.

  • Arneg invested $15 million to strengthen its supply chain in the Santa Fe region.

Costa Rica

  • IBM will offer platform services of multi cloud management in Costa Rica with an investment plan of $21 million. Surveys report that 98% of local companies are planning to adopt multi cloud services by 2021.


Colombia

  • Colombia´s government has developed 102 projects to foster foreign direct investment with the goal of generating over 37,000 jobs in the country. FDI in Colombia is 88% compared to the same time last year.

  • Ternium will begin construction of its delayed new steel mill in Palmer de Varela in November.

Brazil

For more information, contact Achilles Arbex (aarbbex@amtonline.org)

  • Mold Brasil, a tool and die shop that supplies the automotive industry, announced an investment of $40 million in new equipment to expand their large stamping die capacity. This will include a machining center with 10 meters x-axis capacity and a load capacity of 50 tons, as well as a trial press with a capacity 2.000 tons. They also plan to expand into oil and gas, energy, and mining. The Brazilian die and mold industry has annual revenue of about $1 billion. 

  • All automotive OEMs operating in Brazil have resumed operations. Nevertheless, they are operating at a much lower pace due to poor demand and, in some cases, lack of parts that suppliers have not yet been able to provide as their own operations have not fully resumed.

  • Automotive industry suppliers are migrating from Argentina to Brazil. At least three companies (BASF, Axalta, and Saint-Gobain Sekurit) have announced the closure of factories in  Argentina  with plans of moving them to  Brazil.

  • Meritor will open a facility in Roseira, San Paulo to produce off-road/highway and EV axles. Investment is about $50 million.

  • Grupo Petropolis (food and beverage industry) will make $250 million of investments in new facilities.

  • Vale S.A. (metals, mining, and logistics) will advance payments of around $30 million to suppliers to assist them during the pandemic crisis.

  • GPM Group will invest $3 billion in new ports and railways in northeastern Brazil.

  • Canadian Solar confirms investments of $300 million in new facilities to produce non-conventional energy.

  • Dormer Pramet announced that it has chosen Brazil for its R&D headquarters for rotating tools. This is part of the strategic long-term plan of Dormer after the acquisition of Pramet, as Brazil has been instrumental for the company’s growth.

  • World Machinery Works (WMW), a Romanian manufacturer of heavy CNC milling machinery and vertical lathes, has established a Tech Center in Sorocaba and has plans to rent equipment, a strategy that has been adopted by several machine tool builders during the crisis. This has shaken up the local builders as WMW is a major player with competitive pricing.

China


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

  • According to the CNSB (China National Statistics Bureau) in the first five months of 2020, the Chinese major machine tool industries’ revenue declined 9.4% compared to the same period in 2019. Profits declined 6.3%. 

  • For the same five months year-over-year automotive manufacturing investment was down 23.2%, production down 24.1%, and sales down 22.6%. However, in May alone, year-over-year production increased 18.2% and sales increased 14.5%, indicating a major upward trend. 

  • The CAAM (China Association of Automobile Manufacturers) reports that monthly the sales for June were almost 2 million units, 1.8% better than a year ago. June’s sales of EVs was 104,000 units, down 33.1% from a year ago.

  • China is implementing new auto emission regulations (GUO VI). There are two phases. The first commenced on July 1, 2020 and will run until 2023 when the second phase begins. The second phase regulations are stricter than the U.S. EPA Tier3 with most of the pressure on the component manufacturers, rather than the automotive manufacturers themselves. R&D investment and processes are now an urgent priority.

  • In June, China’s exports increased 4.3% and imports increased 6.2% compared to a year ago. For the first half of 2020, China’s international trade value declined 3.2%.

  • The Volkswagen Group and its partner Shanghai Automobile Industry Corp will invest $600 million to rebuild their Shanghai factory to produce the Audi A7L sedan, which will hit the market in early 2022.

Europe

For more information, contact Hubert Sawicki (HSawicki@amtonline.org)

  • Due to the pandemic, European cities are becoming more human-centric which will affect automobile sales. Auto-centric cities like Berlin, Milan, and Lisbon have expanded designated space for pedestrians and cyclists, and London is banning cars on some of its busiest roads.

  • The electric vehicle market continues to expand in Europe and is one of the most promising. The European EV Charging Summit (occurring in Rotterdam this September), will bring together key industry stakeholders from all facets of the EV charging industry to discuss the required infrastructure and strategies for a cleaner, sustainable future.

  • Hydrogen powered vehicles is also a growing industry in Europe. Hyundai Motor Co. shipped the first 10 units of the Hyundai XCIENT Fuel Cell to Switzerland with plans to expand to other European countries.

  • Italy’s government is guaranteeing 80% of a new $7.1 billion credit facility to Fiat Chrysler Automobiles’ (FCA’s) Italian operations, providing liquidity as the automaker deals with the pandemic.

  • The European aerospace industry has returned to work. Production operations at Dassault’s main assembly facility in Bordeaux-Merignac, France are now back to normal, now with two smaller shifts. The first flight for its latest aircraft, the Falcon 6X, is planned for early 2021.

  • A Lithuanian company, NanoAvionics, is working with SpaceX to launch its satellites.

  • According to the International Federation of Robotics the stock of professional services robots, primarily logistics and medical, is expected to grow from 270,000 units in 2018 to 1 million units by 2022. 

  • The market of IoT technologies is expected to increase from $240 billion to $520 billion by 2021.

  • According to the annual Manufacturing Risk Index from Cushman & Wakefield, the Czech Republic has the most favorable conditions for the expansion of production within the EU. The Czech Republic ranks fourth in the world after China, the United States, and India in this regard.

India

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

  • The Indian government is considering an additional 20% import duty on solar power modules to reduce imports and encourage domestic production. Presently, 80% of solar cells and modules in India are imported from China. 

  • The government is also working on schemes to provide five-year incentives to the auto industry, encouraging them to increase local production and boost exports. 

  • After relaxing the restrictions for FDI in the defense sector from 49% to 74%, the Indian government is also working on providing an array of incentives to boost the domestic industry and make it more attractive to foreign investors. These include capex and R&D subsidies, tax exemptions, and low-rate financing. 

  • Foxconn is planning to invest $1 billion to expand their factory near Chennai which will add 6,000 jobs.

  • Apple’s second largest contract manufacturer, Pegatron, has recently registered a subsidiary in India and is in discussions with various state governments regarding site selection. 

  • Vikram Solar will invest $726 million for a new 3GW capacity solar energy equipment factory in the southern part of Tamilnadu.

  • Clean energy firm ReNew Power is planning to invest $300 million to set up a facility to manufacture Solar cells and modules for a 2GW capacity. 

  • Japan’s Tsuzuki is setting up a plant in Jhajjar, Haryana to manufacture automotive steering knuckles for domestic and export markets.  

  • Present motorcycle sales in India are near the pre-COVID level.

  • Tractors sales in June 2020 outperformed 2019 by 12%.

  • India has agreed on international air ‘travel bubbles’ with the U.S., Germany, France, and UAE and is working on agreements with the UK and several other countries in order to open up global flights again.