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 third installment in the bi-weekly series.
Mexico
For more information, contact Carlos Mortera (cmortera@AMTonline.org)
Mexico is the largest producer of medical devices in Latin America and the eighth in the world. Mexico quadrupled its production of ventilators in the first four months of 2020, going from 700 to 2,500.
Mitchell Plastics announced the expansion of its first plant in Mexico, in Querétaro City, with an investment of $22 million after just five years. The Canadian-owned company specializes in the injection and painting of plastic components for clients such as Ford and General Motors.
The Puebla-Tlaxcala environment continues to attract companies from the automotive industry. BM of Mexico moved from Ciudad Juárez and inaugurated a plant in Tlaxcala with 200 million pesos ($8.75 million) in investment. An Italian company with 75 years in the automotive market, BM of Mexico is dedicated to the production of grills, side posts, rear spoilers, spoilers, consoles, and dashboards for clients such as Volkswagen and Audi.
Hitachi Cable will install a second plant in Querétaro with a 311 million peso ($13.61 million) investment. This plant is expected to begin operations in the El Marqués Industrial Park in October. Hitachi Cable, a supplier and assembler of brake hoses, will manufacture cables for hybrid electric vehicles (HEV) and battery electric vehicles (BEV) and sensors for hybrid and electric cars in the new plant, increasing the supply for this type of vehicle in Bajío.
Magna International confirmed the return to operations of its 33 facilities in Mexico. Magna manufactures auto parts for General Motors, Ford, Fiat Chrysler, Daimler, BMW, and Volkswagen.
A new trade show has been announced in Mexico: FITMA 2021 – International Expo of Technology and Manufacturing for Latin America. It will take place on March 9-11, 2021 at Centro Banamex, Mexico City. The show is sponsored by Gardner Business Media and Modern Machine Shop Mexico.
USMCA will be in effect as of July 1, replacing NAFTA. Most companies are still trying to evaluate what it will mean for them and the effect it will have on their business in the region. While the new agreement will lower the costs of small transactions, expedite certain trade operations, and reduce bureaucracy, it will also introduce more controls concerning the origination of goods, value content, and preference claims.
South and Central America
For more information, contact Carlos Mortera (cmortera@AMTonline.org)
Volkswagen started the production and export of the motor box MQ281 in their plant in Cordova, Argentina with an investment of $150 million with the utilization of 135 machines, 25 of which are exclusive for this new product.
In June, the auto industry in Argentina started to come back to life following sanitary protocols; regulations allow only one shift per day and production at one-third of the installed capacity. There are 12 automotive plants in Argentina, including Ford, Volkswagen, Peugeot, General Motors, Citroën, Toyota, Honda, Nissan, Fiat, Renault, and Iveco.
Chile, Ecuador, and Peru are the countries in Latin America struggling the most with COVID-19. They have been forced to extend their lockdown, and economic activity has dropped 40%.
Brazil
For more information, contact Achilles Arbex (aarbex@AMTonline.org)
44% of all industries in Brazil are still standing idle either due to a lack of components or because of various policies and procedures put in place to avoid the spread of the virus.
Machine tool builder Heller reopened their plant in June to answer demand and fulfill orders.
Swedish truck and bus manufacturer Volvo will invest 1 billion reals ($186.6 million) in Brazil from 2020 to 2023. The funds will be allocated to research and development of products and services in all businesses, including construction equipment and marine engines.
German conglomerate Siemens plans to invest around $450 million in Brazil in 2020, targeting oil and gas and energy sectors.
SEW Eurodrive confirms a $60 million investment to expand manufacturing capacity until 2023.
PSA Group (Peugeot-Citroen) will invest $60 million in its Porto Real facility to produce a new model. Investments will allow the company to add 30 new robots to a production line where 245 are already in operation. The bulk of the investment to be put toward the automation of the facility.
Moody’s announced on June 22 the downgrading of the economic outlook for Brazil. The agency now projects a GDP drop of 6.2% for 2020 while the last projection predicted 5.2%. They indicated that Brazil is now more vulnerable due to the uncertainty around the country’s capacity to control the pandemic. For 2021, the growth projection was elevated from 3.3% to 3.6%; this is due to a deeper drop this year than expected rather than a stronger recovery. Nevertheless, Moody’s Ba2 sovereign credit rating perspective for Brazil was qualified as “stable.”
ANFAVEA, the Brazilian Automotive Manufacturing Association, predicts a drop of 40% in sales of automobiles and light trucks to 1.67 million vehicles. This is the lowest since 2004. Brazil’s installed capacity is for an annual production of 5 million vehicles from 65 manufacturing plants throughout the country.
Overall industrial production output for 2020 is predicted to drop 33.1% by a Reuters poll of economists.
Due to an excellent grain crop, the heavy truck and agricultural machinery manufacturers are optimistic for growth. Most of them are in the southern region of the country.
VW announced the production of their new vehicle, Nivus, at their new, 24,000-square-meter plant in Sao Bernardo do Campo, SP. This vehicle was the first one developed without using a physical prototype as its design, and testing was all digital and virtual. The manufacturing plant acquired 419 new units of equipment, including 90 robots. The stamping shop acquired an extra-large stamping press that quadrupled the hourly production of parts in relation to the previous process.
On June 24, the Brazilian government announced infrastructure investments for various states which could exceed $300 million. This will boost the production and consumption of excavators, construction equipment, and trucks. This is very good news for member companies who have business with agriculture companies (Caterpillar, CNH, Volvo, and JCB, and Brazilian manufacturers like Jacto, Stara, and Tatu) and heavy-duty OEMs (Scania, Mercedes, MAN, VW, Ford, and Volvo, and Brazilian manufacturers like Agrale).
China
For more information, contact Fred Qian (fredqian@AMTchina.org)
On June 2, three Chinese major automobile manufacturers, FAW, DFMC, and Chang An Auto, with their partner, Nanjing Jiangning Economic Development and Technology Co., established a group company, Zhongqi Chuangzhi Science and Technology. The total investment is 16 billion renminbi ($2.3 billion). It is equally owned with 25% shares for each party. Their main businesses will be the manufacturing of industrial automation control systems, new energy vehicles, and batteries.
CCMA (China Construction Machinery Association) reported that excavator sales in May reached a record high of 31,744 units, a YOY increase of 68%. The previous forecast was 50%.
CAAM (China Association of Automobile Manufacturers) reported total May sales of 2.2 million units, which represents YOY growth of 14.5%. However, monthly sales of EVs in May was only 82,000 units, representing a YOY decline of 23.5%.
CNBS (China National Bureau of Statistics) reports that industrial production in May increased by 4.4% YOY, and the growth rate was 0.5 percentage points higher than in April.
Sinovac Biotech Ltd., a Chinese company, conducted a clinical study on its COVID-19 vaccine in Beijing on June 16. More than 90% of the people administered with the vaccine produced neutralizing antibodies within two weeks. The phase three trial will be carried out in Brazil, which will be the final stage of human testing before getting approval for public use.
On June 11, after zero cases for almost two months, Beijing reported one local infected case of the virus. The peak came on June 13 with 36 confirmed cases. By June 23, the number dropped to 7. The experts asserted that the second wave of the virus was under control.
Some manufacturing sectors recorded higher growth than the same time last year after resuming operations (statistics for May 2020 from National Bureau of Statistics):
Construction machinery: up 38.4% (excavator up 82.3%; concrete equipment up 42.2%)
Automobile: Trucks up 54.7%, SUVs up 33.5%
3C: Laptops up 28.6%, smartphones up 8.4%, and smart TVs up 7.1%
More flights resumed between China and overseas destinations; for example, Southern Airline and Xiamen Airline are flying from Guangzhou and Xiamen to Vancouver twice per week starting in July.
Europe
For more information, contact Huber Sawicki (HSawicki@AMTonline.org)
The first quarter indicators of the economic decline in Europe as a result of COVID-19, especially national GDP figures, show that they are usually better than predicted. Good examples are the UK (down 2%), Germany (down 2.2%), Poland (down 0.4%) and even Russia (plus 0.6%). Unfortunately, the trend reverses in April and May. Manufacturing has been most seriously affected.
For some time, the European companies have also adhered to the current world trend of reshoring. Particularly active are companies from the UK and France. They reshore not only from China and India, but also from other European countries like Poland, Eastern Europe, and even Germany.
The trend of emerging new companies being transnational from the very beginning has become very visible. Such companies have been branded as “Born Global Companies,” and they operate internationally immediately after start-up, often without a solid home market, and operate in subcontracting, R&D, commercialization of IP products, ICT, international distribution, cross-border transport, logistics, and finance, especially in EU-funded projects either through a formal multinational structure, or based in individual contacts between the participation organizations. They are particularly helpful to SMEs and account for about one-fifth of young enterprises.
The UK suffered its biggest GDP decline on record from March to April: down 20.4%.
UCIMU, the Italian Machine Tool Builders’ Association, has reported that their domestic sales dropped 41.3% in Q1 compared to the same period last year.
India
For more information, contact Arun Mahajan (AMahajan@AMTonline.org)
IMTEX 2021, India’s largest machine tool show, has been postponed from January 2021 to June 2021 and will be held June 17-23, 2021.
To promote local manufacturing of defense equipment, the allowable FDI under the automatic route has been enhanced from 49% to 74%.
As part of structural reform to become more self-reliant, the Indian government has decided to allow private sector companies to be part of the country’s larger space program, which includes satellites, launches, and other space exploration-based services.
Adani Green Energy will invest $6 billion to put up the world’s largest solar project with an eight gigawatt (GW) capacity plus two GW of additional solar cell and module manufacturing capacity over the next five-year period.
COVID-19 General updates:
Since last month, all OEMs and their supply chain partners have resumed their manufacturing activities under the stipulated sanitization measures and social distancing norms.
There are no restrictions of movement of goods across the country.
A few states and districts require a “travel pass” for people moving.
Domestic flight travel is partially restored. Travelers need to apply for an e-travel pass which is required to go through various checks and measures at the airport before being able to board a flight. Many destination states have stipulated institution or home quarantine requirements varying from one to two week periods for arriving travelers. A business traveler returning within 48 hours is exempted from quarantine provided he has undergone a COVID-19 test 48 hours before his actual travel.
International flight operations have not yet been restored. An exception is Air India, which offers a limited number of flights from various countries to bring back Indian nationals.
Japan
For more information, contact Li Xingbin (lixingbin@AMTchina.org)
JMTBA reported a drop in the value of machine tool orders of 27.5% in April compared to March and a decrease of 48.3% in relation to the same months last year. This is the 19th consecutive month of decline.
According to JMTBA, major industry orders in April fell by 40.1% compared to March in industrial machinery; by 35.0% in motor vehicles; by 28.3% in electrical and precision machinery; and by 65.1% in aircraft, shipbuilding and transport equipment.
JMTIA reported that the importation of metal-cutting machine tools in Japan in April was at 70.7% of the levels of the same month last year. Metal-forming machinery imports were at 61.6% in the same period.
