Auto Industry Performs at 55 Percent Capacity

The automotive industry was only able to perform at 55 percent of its capacity during the first months of 2022 due to the continued delays in shipments from Asia, causing many plants across the country to lose up to 30 percent of their labor force.

These hardships could continue impacting the industry during March and April during what could be the hardest time for the industry throughout the entire year, according to Industrial Automotive Group Manufacturing Automotive Enterprises Network (MAEN). Grupo MAEN President Cuitláhuac Pérez Cerros recognized that the sector expected to see a recovery due to the alleviation of the semiconductor shortage but additional challenges have arisen, further complicating the industry’s recovery.

Similar to last year, 2022 is proving once again the unpredictability of the market, with potential challenges arising at any given moment and rerouting expected production or recovery rates. This year, various supply chains have been impacted by logistics processes, an issue that arose last year but only worsened since.

Delays began last year due to maritime transportation problems to and from Asian markets. Last December, SE Asian Logistics contractor Röhlig’s freight report predicted continued sea and air freight delays in China and the region to roll into 2022 due to congested ports. Chinese freight operations are also being impacted by the prioritization of COVID-19 testing kits.

Freight delays have now expanded to North America due to climate reasons, impacting the manufacturing plants of General Motors, Volkswagen, Toyota and other manufacturers, which had to halt their production temporarily due to the shortage of not only semiconductors but auto parts in general. “There are trucks that stop for six weeks,” said Pérez Cerros regarding the delays in product delivery.  

To face this crisis, companies are deploying new tactics such as getting rid of machinery and restructuring their manufacturing spaces and workforces rather than executing massive cuts in personnel, explained Grupo MAEN. This is because the automotive industry knows that letting employees go may mean losing them for good, said Pérez Cerros.

Grupo MAEN is betting on the technological innovation and future of the industry and signed a collaboration agreement with Universidad Tecnológica de Aguascalientes (UTA) for continued technological innovation. The automation of manufacturing processes could become an answer to some of the continued challenges the industry has been facing over the last two years and are expected to continue for the coming months at least.