Ford’s Mexico engine supply problems sound warning for global supply chains

Following the news that Ford is facing production bottlenecks in the US due to COVID-19 production constraints at an engine plant in Mexico;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“The news from Mexico serves as a wider warning to the auto industry that the COVID-19 pandemic is far from over and that international supply chains remain very vulnerable.

“Ford has ramped up vehicle production rapidly at some of its US plants, which has exposed the fragility of its supply chains in the context of constrained engine supply from Mexico.

“Mexico is an important low-cost production source and North American vehicle production supply chains are highly integrated across the US, Canada and Mexico. Mexico is also emerging as one of the worst hit countries by the coronavirus – which explains actions by the authorities such as in the State of Chihuahua to limit employee attendance to 50%.

“Around 40% of the parts required to assembly vehicles in the US are imported from Mexico.

“The international nature of automotive supply chains means manufacturing plants in different countries may be at very different capacity utilization levels due to significant variations in the pandemic’s impact.

“Ford’s difficulties over engine supply highlight the currently fragile state of automotive supply chains across the globe.”

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