Actionable global business intelligence is vital to our members during these uncertain times. AMT’s Global Tech Centers 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.
CHINA
July’s total trading value of imports and exports was $418.57 billion, an increase of 6.5% from June. Exports increased 10.4%, with imports increasing 1.6%. The seven-month trading trend shows increases with Southeast Asia, the EU, and Japan. Trading with the United States, however, has declined.
CNBS (China National Bureau of Statistics) announced that the growth rate of mechanical industrial value added in the first half of 2020 was down 1.5% YOY. There are five major industrial sectors included in this indicator: special purposed equipment, universal equipment, automotive, electrical machinery, and instruments.
Automobile manufacturing has been a bright spot following the pandemic, with a growth rate in July of 21.6%. Retail sales were up 12.3%.
Six automotive manufacturing groups – SAIC, DFMC, FAW, BAIC, GAC, CHANGAN – released their 14th five-year-plan development strategy. In all cases, the projected growth through 2025 is impressive as they gear up to meet the expected increased consumption demand.
CCMA (China Construction Machinery Association) released data for the first half of 2020. The big winner was excavators, up 24.2% YOY with domestic consumption increasing 24.8% and exports 17.8%. Market share for the three top manufacturers were: SANY – 25.5%; XCMG – 16.1%; Caterpillar – 11.2%. Growth, to a lesser extent, was also seen in loaders. Earthmoving equipment saw a slight decrease YOY.
Foreign Direct Investment (FDI) for the first half of 2020 totalled $77 billion, about the same as the first half of 2019. Among the top sources of investment were Hong Kong, Singapore, and the U.K.
INDIA
Further to the Ministry of Defense’s announcement of banning imports of arms and artillery which could be produced and sourced from within India, there are now around 100 items identified which would be brought under this import embargo over the next three-to-four-year period. Several items on the list are already being manufactured in India by state-owned companies as well as various privately held enterprises, with the idea of keeping them on the embargo list to let them mature and encourage them to form JVs with global players. This direction would help in augmenting the level of manufacturing in the defense and aerospace sectors in India.
Samsung is finalizing plans to shift a major part of its smartphone production to India from Vietnam and other countries. They plan to take advantage of the Indian government’s production linked incentive (PLI) scheme announced a couple months ago.
Daimler Trucks infused $325 million to start a second shift of production at their Oragadam, Chennai-based manufacturing plant due to the growth in demand for light and heavy trucks.
Tata Motors is planning to invest around $275 million to enhance capacity of producing commercial vehicles at its Dharwad, Karnataka-based manufacturing plant.
Private sector Medha group will invest $150 million to set up a rail coach factory in Telangana. The facility would manufacture coaches, locomotives, intercity trainsets, metro trains, and monorails.
Medtronic PLC is investing $170 million to expand its R&D center in Hyderabad.
Japanese company Amperex Technology acquired 180 acres of land in Haryana to set up a lithium iron polymer (LIP) battery plant.
BRAZIL
JCB will invest $20 million to expand its portfolio of products. The objective is to take advantage of the investments that will be made by the Brazilian government in infrastructure projects.
Brazilian WEG is expanding its portfolio of products as it enters the oil and gas segment. The first investment is about $35 million.
Brazil’s 2020 GDP projection continues to improve. It is now -5.52%, per the Central Bank.
Swiss Tornos is incorporating in Brazil after seven years of a partnership with its local distributor, Bener. Plans are to open a tech center in the city of Campinas to display machines and technology.
Rio de Janeiro state, the birthplace of Brazilian petroleum corporation Petrobras and home for companies like Peugeot, Citroen, and VW Trucks and Buses, implemented new legislation for reducing taxes paid by companies who use steel as a raw material. The idea is to increase competitiveness of the state against Sao Paulo and attract companies who are planning to invest in Brazil. The initiative has been named the “Law of Steel.”
Seco Tools, a Swedish manufacturer of tooling, is expanding capacity at its facilities in Sorocaba to produce customized tooling. Investments have been made in 5-axis grinding machines and lathes.
Ardagh, a packaging manufacturer from Luxembourg, is investing heavily in the production of cans in Brazil as demand continues to grow.
The industrial PMI index has been trending up: 36 points in April; 38 points in May; 52 points in June; and 58 points in July. Unemployment is at 14%.
EUROPE
The GDP in the eurozone (19 countries of the 27-member EU who use the euro currency) is down by 12.1% Q2 over Q1, and unemployment has been reduced by 2.8%. Industrial production is up 9.1% both in the eurozone and the entire EU. U.S. exports to the EU for the first half of the year was $123 million, more than a 60% drop from the same period last year.
The manufacturing PMI for the EU as of mid-August is 51.8. Consumer confidence is -15.
In July 2020, the European Commission published the European Skills Agenda for sustainable competitiveness, social fairness, and resilience. It sets ambitious, quantitative objectives for upskilling (improving existing skills) and reskilling (training in new skills) to be achieved within the next five years. The aim is to ensure that the right to training and lifelong learning becomes a reality across Europe to the benefit of everyone. This has been widely approved as the right policy to maintain European industrial competitiveness at home and abroad.
EUCAR, the European Council for Automotive R&D, includes all leading car manufacturers operating in Europe in its membership and is a good indicator for the future trends in the automotive sector. Several current projects focus on electromobility and EV technology.
The aerospace and defense industry companies of all sizes are calling for a rational and expedient EU-U.K. agreement in preparation for the United Kingdom’s final departure from the EU.
Rolls Royce is actively involved in the development of sustainable aviation fuels – fuels that are not derived from fossil-based oil or gas – to get the industry ready for a net-zero carbon future. It is assessed that such fuel will be ready for wide use within 10 to 20 years. Most RR aircraft engines can already operate using blended fuels, and the regulations now allow for a 50% blend.
According to Siemens Digital, aerospace and defense companies are experiencing a digital transformation which in turn is leading to a period of exciting innovations. However, this also means they are faced with delivering new and increasingly complex products with better performance to their customer faster, while also providing increased levels of product support for the life of the product. With today’s digital technology, the complexity can be turned into an advantage when a digital transformation strategy for manufacturing is implemented.
Across Europe, a raft of new nuclear projects is springing up to provide a reliable, yet low carbon, source of energy. Countries like Turkey, France, Belarus, Finland, Romania, Bulgaria, Slovakia, the U.K., and Sweden have plans for either new plants or upgrades to existing plants.
MEXICO AND LATIN AMERICA
Mexico
Adval Tech, a company in the automotive sector, is preparing an expansion project at its plant located in El Marqués in the central city of Queretaro. They will produce plastic parts for the air conditioning systems in the Audi automobiles manufactured at Puebla.
Prime Wheel Mexico, a manufacturer of wheels, is planning to invest $70 million to expand its plant located in Baja California. This will create 1,500 to 2,000 additional jobs.
The automotive sector in Mexico assembled 294,946 units in July 2020. 1,467,644 automobiles have been assembled in the first seven months of 2020.
It is estimated that intelligent automation and digitization will grow Mexico’s GDP around 14% by 2030. Currently, the manufacturing industry in Mexico represents around 25% of the GDP.
BD Medical, a company which produces diagnostic systems, will create 1,600 new jobs in Hermosillo in Sonora.
BMW’s San Luis Potosí facility is assembling the BMW 330e hybrid car and recently hit the 50,000-unit mark for the BMW 3 Series.
Argentina
Volkswagen Argentina has exported more than 10,000 MQ281 transmissions. They have worked double shifts to supply the demand in the international market.
Catalent, a softgel producer, will build their third factory with a $5 million investment. It will be finished in December 2021.
Colombia
Colombia’s expected growth over the next five years in manufacturing, creative industries, infrastructure, health, and entrepreneurship, is focused on the Bogota region, spurred on by $560 million of investments in the manufacturing industry. Bogota has 37% of this in sectors such as energy technology, electric equipment, aerospace, and circular economy-related endeavors.
The mining sector will begin exploration again. It is considered a critical pillar to reactivate the economy.
