Supply chain migration

As automakers ramp up operations in China, suppliers must consider the challenges as well as the opportunities of supporting them there.

As global automakers such as General Motors, Volkswagen, Honda, and others expand in China, they are escalating a supply-chain migration that could have profound effects on automotive component and material suppliers worldwide. This migration compels suppliers to respond proactively or risk not only missing new opportunities but also losing share position with their long-standing customers.

The migration begins with the automakers expanding their vehicle production and assembly facilities in China to serve the burgeoning local market and, eventually, as an export base for international markets. To be competitive and streamline their supply-chain structure-enabling JIT (just-in-time) operations, as an example-they naturally localize sourcing of much of the final vehicle material and components.