German media: Building a completely sufficient supply system in the automotive industry is undoubtedly an unrealistic fantasy
The Neue Zürcher Zeitung published a commentary stating that the Nexperia supply disruption incident once again shows how vulnerable global supply chains are in the face of geopolitical competition. Reducing single dependency and expanding diversified layouts have become an urgent priority for German industry:
"The trend of globalization in any industry may not be as evident as in the automotive industry. For example, Volkswagen Group has thousands of first- and second-tier suppliers worldwide. The situations of BMW and Mercedes-Benz are similar. A modern high-tech vehicle incorporates components from all five continents. In this complex global supply network, some suppliers play irreplaceable important roles. Nexperia is such a company.
Building a completely sufficient supply system in the automotive industry is undoubtedly an unrealistic fantasy. This would only lead to a sharp rise in costs and ultimately become a burden for consumers. Faced with strong pressure from Chinese low-cost competitors, German automakers cannot and will not take such steps. Therefore, finding a balance between production security and cost control will remain extremely difficult. When a crisis occurs, companies must also have the ability to flexibly and quickly find alternative solutions. After Russia's invasion of Ukraine, wire harness factories in Ukraine were temporarily shut down, but the automotive industry quickly proved that it had the flexibility to respond.
The era of trouble-free free trade with institutional competitors like China has become a thing of the past. This is not only evident in the chip industry, but also in the rare earth sector. For multinational corporations, dealing with crises will become the new normal."
Original: www.toutiao.com/article/1847432313013248/
Statement: This article represents the views of the author."