A new outbreak of COVID-19 in China has caused plant and port closures in that country, while the Russian invasion of Ukraine has raised an alert about a possible shortage of some inputs needed to make components.
The problem ranges “from the aluminum that is used to build the bodywork, to the palladium that goes in the catalytic converters and the nickel in the batteries of electric vehicles,” lists Magda López, CEO of Renault in Mexico.
Russia controls about 10% of the world’s copper reserves and is a major producer of nickel and platinum. While nickel is a key raw material used in electric vehicle batteries, copper is used in motors, electrical wiring, sensors, as well as infotainment systems.
But not only the volatility in prices and the scarcity of some inputs is making spare parts more expensive, but also the logistics cost puts pressure on prices.
Neither the ship, nor by train… the spare parts go by plane
The Japanese manufacturer Mitsubishi must supply about 35,000 pieces to its distributors each month to support a vehicle fleet of 44,000 units that roll in the country with the brand’s logo. Most of the spare parts arrive in Mexico by sea from Thailand, Indonesia and Japan; however, the manufacturer has also had to resort to air cargo to speed up the transfer of some critical components.
“When we saw the need to increase inventory to deal with the disruptions we were seeing in the chain, we decided to start fly the pieces”, details Jorge Yanes, director of After Sales of Mitsubishi Motors of Mexico. “We are identifying what would be the most critical parts, such as a part of the electrical system or the cooling system, so that if at any time we have to flyLet’s do it,” he adds.
Yanes warns that although air transport has been an alternative to reduce waiting times, not all parts can be transported by plane. “An air bag, for example, cannot be blown up due to security restrictions. Not an accumulator either,” he explains.
Stabilization in prices and supplies is still a long way off, as those interviewed predict that supply chains will continue to be in turmoil during 2022. “There are not enough shipping fleets to speed up the transportation of goods to meet demand. I think it will take us months to be able to stabilize the supply,” says López.