Automotive Industry Sees Wins, Losses in FebruaryBy Alfonso Núñez | Wed, 03/09/2022 - 16:39
Despite seeing the worst monthly light vehicle sales since 2012 in Feb. 2022, the auto sector had a small victory thanks to an annual increase in light vehicle production. Meanwhile, the Russia-Ukraine conflict caused a historic rise in the price of palladium but no major supply chain disruptions are expected due to the growing demand of EVs.
Auto manufacturers are looking to capitalize on the growing interest in EVs. Toyota Mexico’s new sales president focuses on expanding the number of EV models offered in the country, while Ford’s new business model separates EVs from its ICE vehicle business. To continue optimizing EV efficiency, the lightweighting of EV auto parts will grow in importance in the coming years.
Finally, auto parts factory workers saw a globally appraised victory when they replaced an old-school union with a new, independent one. Meanwhile, female participation in the industry continues to be limited due to unsatisfactory working environments.
This week in automotive:
Mexico Sees Worst February in Light Vehicle Sales Since 2012
The Mexican automotive sector saw its worst February since 2012 after sales contracted by 3.9 percent year-over-year in Feb. 2022. However, the industry was still able to see a month-to-month increase of 1.29 percent despite the semiconductor shortage and global logistics delays. The sector is expected to see an annual growth in sales of 0.21 percent.
Mexican Light Vehicle Production Increases
Production of light vehicles in Mexico increased by 0.6 percent in Feb. 2022. However, exports decreased 5.6 percent during this time.
Russia-Ukraine Conflict Increases Cost of Palladium
The cost of the essential catalyst converter component palladium saw a historic 40 percent increase, from US$1,850-US$1,937 to US$3,017 per ounce, following Russia’s invasion of Ukraine. Russia is the world’s top supplier of palladium through its 40 percent market share. Thankfully, no major supply chain disruptions are expected due to growing interest in EVs.
Ford Separates EV, ICE Vehicle Businesses
Looking to solidify itself as a leader in the EV market, Ford’s new organizational structure would split into two business units: Ford Model e and Ford Blue. Ford Model e will adapt new technologies, design electric products and transform the buying experience through e-commerce platforms to meet the growing demand for EVs globally.
Toyota Mexico Names New Sales President
Toyota Motor Sales and Lexus Mexico named Guillermo Díaz as its new president after the retirement of Tom Sullivan following more than 35 years with the company. Díaz plans to prioritize electrification of the Mexican market by increasing the number of hybrid and electric models in the country, providing customers with more options. In 2021, Toyota made up 21 percent of EVs sold and Díaz plans to increase the brand’s market participation.
Independent Victory at Tridonex Could Open Door to Other Unions
Mexican automotive unions in Mexico saw another win after Tridonex auto parts plant workers in the US-Mexico border city of Matamoros successfully replaced the CTM-affiliated union SITPME with SNITIS. The process had received support and monitoring from US and Canadian authorities as per the USMCA Agreement, with representatives voicing their support for plant workers.
Female Leadership in the Automotive Industry Remains Low
In order to break the glass ceiling limiting female participation in the automotive sector, incentives are needed to attract women into the industry and promote their permanence in it. While participation has grown, it is still limited. An estimated 45 percent of women in the sector say they would switch to a different industry if possible due to limited opportunities, diversity and poor work-life balance.
The Electric Future of Lightweighting
Lightweighting has long been a priority for auto manufacturers. With the electrification of the industry, auto parts manufacturers are now looking for ways to lightweight the production of EVs, vehicles with a fundamentally different architecture than ICE vehicles. EV lightweighting will involve lighter batteries and electric traction motors. Join Mexico Automotive Summit 2022’s “Light Weighting for EV, ICE Efficiency” panel on March 24 to hear industry expert’s take on the situation.