Global automakers rethink supply chains amid shifting relations with China
Automakers are sounding alarms about China’s strained ties with the international community, including its relationship with Russia. The result is a strategic push to rebuild and diversify supply chains. Firms are exploring options to reduce dependence on Chinese spare parts by moving some production to alternative locations while maintaining critical components for the domestic market in China.
In particular, Volvo and Mazda are examining plans to shift the manufacture of certain parts away from China to other regions. Similarly, Ford and General Motors are expanding auto parts production within the United States, aiming to strengthen resilience and shorten sourcing cycles. These moves reflect a broader trend of regionalizing manufacturing to buffer against geopolitical risk and supply disruptions.
Honda is evaluating strategies to lower supply chain risk, including sourcing diversification and localized manufacturing in multiple regions. At the same time, manufacturers emphasize the importance of keeping adequate production capacity in China to serve the domestic market and maintain competitive pricing for local customers.
The shifting landscape invites a balanced approach: producers seek safer, more predictable sourcing while continuing to support Chinese customers and the national economy where feasible. This multipronged strategy involves assessing supplier capabilities, tariffs, logistics costs, and the speed at which production can be ramped up or retooled in response to demand and policy changes.
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Source: Financial Times