Insights into the New Manufacturing Locations

Selected business news articles on global production

As global businesses seek to diversify, increase resiliency and connectivity of their supply chains and decrease reliance on a single country, Vietnam has become a top destination for investment in manufacturing due to its strategic location and advantages in shipping, competitive labor, and production costs.

Vietnam Briefing (Dezan Shira & Associates) | 4 January 2022

German fashion house Hugo Boss is expanding production capacity closer to its base in Europe to reduce its dependence on south-east Asia at a time when global supply chains are under severe pressure. Facing supply chain disruptions with supply shortages, delays and higher shipping costs, Hugo Boss is enlarging its factory in Izmir, Turkey, where it plans to hire almost 1,000 more workers, increase staff by a third and invest more in machinery and tools.

FT.com | 30 December 2021

China has unveiled a five-year plan to drive its ambition of becoming a global innovation hub for robotics by 2025. It hopes to get there by focusing on enhancements in key components such as servomotors and control panels. The Chinese government is expecting high-end advanced robots to be adopted across more sectors, including automobile, aerospace, railway, logistics, and mining.

ZDNet | 29 December 2021

Shein has seized over a quarter of the US fast-fashion market and its rapid growth threatens to disrupt established global players such as Spain’s Inditex and Sweden’s H&M. The business is built around the fast-fashion model pioneered by others, including Inditex’s Zara. But through use of automation, artificial intelligence and a well-drilled supply chain, Shein has found a way to do it both cheaper and faster.

FT.com | 9 December 2021

Danish toymaker Lego is to invest more than USD 1bn in building a factory in Vietnam to respond to increased demand in Asia and to make its supply chain more resilient following a series of shocks from Covid-19. It will be the sixth factory for the world’s largest toymaker following one in China, three in Europe and one in Mexico, and will mostly serve south-east Asian countries as Lego looks to capitalise on the rise of the middle-class in the region.

FT.com | 8 December 2021

The Batu Kawan Industrial Park — part of a comprehensive master plan to develop 7,000 acres on Batu Kawan Island — houses about 160 companies, comprising a mix of foreign multinational corporations and local companies. Business leaders highlight the key factors that contributed to their decision to invest in Batu Kawan, namely: the availability of skilled labour, proximity to their regional customers, and ease of doing business.

The Edge Markets | 18 November 2021

India’s manufacturing revolution will increasingly need to be driven by large, global-scale conglomerates. Building global scale companies is an area where India lags significantly.

The Economic Times | 15 November 2021

Major clothing and shoe companies are moving production to countries closer to their U.S. and European stores, smarting from a resurgence in cases of the Delta variant of the coronavirus in Vietnam and China that slowed or shut down production for several weeks earlier this year. Their announcements come amid a massive shipping logjam that is driving up costs and forcing companies to rethink their globe-spanning supply chains and low-cost manufacturing hubs in Asia.

Reuters | 14 November 2021

China's leading smartphone maker Oppo is developing high-end mobile chips for its premium handsets in a bid to gain control over core components and reduce its reliance on foreign semiconductor suppliers Qualcomm and MediaTek. It is a bet on differentiating itself from other smartphone makers and softening the blow from the global processor shortage.

Nikkei Asia | 20 October 2021

Despite modest local sales, Morocco has gained critical mass as an automotive manufacturing hub. In 2018, the kingdom surpassed South Africa as the biggest exporter of passenger cars on the continent. The Moroccan car industry now directly employs some 220,000 people, most of whom work for roughly 250 suppliers that have sunk roots in the country since carmakers began to gain real traction more than a decade ago.

FT.com | 12 October 2021

A Chinese-made passenger jet set to compete with American and European rivals counts roughly 40% of its core component suppliers as overseas companies, exposing the risks posed by U.S. trade frictions to a plane that has been under development for more than a decade. Chinese companies are supplying the fuselage and the wings. But a host of Western suppliers are providing the brains and heart of the plane -- the communication and flight control systems, among other core components.

Nikkei Asia | 2 October 2021

Fashion brands like Benetton are increasingly turning away from globe-spanning supply chains and low-cost manufacturing hubs in Asia, in a shift that could prove a lasting legacy of the coronavirus pandemic. Italy's Benetton is bringing production closer to home, boosting manufacturing in Turkey, Serbia, Croatia, Tunisia and Egypt, with the aim of halving production in Asia from the end of 2022.

Daily Sabah | 30 September 2021

The COVID-19 pandemic and the resulting massive production disruptions in Southeast Asia will lead to greater diversification and a major reshaping of global supply chains, according to experts. The lockdowns and other measures have shown how stretched and fragile global supply chains are today. Having so many key industries like electronics and textile production concentrated in just a few places has been bad for many businesses.

Deutsche Welle | 5 September 2021

Reshoring has shot up the trade lexicon as ties with China, the «factory of the world», become more unsettled and the pandemic pummels global supply chains. A growing number of executives say they want to diversify away from the Asian giant and make supply chains more resilient. However, many find reshoring is far from straightforward.

Global Trade Review | 12 August 2021

As global companies adapt their manufacturing and supply chain strategies to build resilience, India has a unique opportunity to become a global manufacturing hub. It has three primary assets to capitalize on this unique opportunity: the potential for significant domestic demand, the Indian Government’s drive to encourage manufacturing, and a distinct demographic edge, including a considerable proportion of young workforce.

Modern Diplomacy | 3 August 2021

The reshaping of Airbus’ global supply chain during the pandemic will shift greater focus to China, the world’s fastest growing aviation market. According to the company’s Head of Procurement in China and East Asia, Airbus is building a «vertical integration supply chain» to source parts and materials, assemble, and deliver aircraft locally. The strategy will «lower costs of transportation and raise efficiency», adding that Airbus will also work collaboratively with local Chinese suppliers to bring them «in line with global Airbus standards», strengthening its ties and capabilities across the territory.

Supply Chain Digital | 3 August 2021

China Baowu Steel Group became the world's largest steelmaker by volume in 2020, making it the first company to overtake ArcelorMittal in 19 years and the first Chinese player to climb to the top of the list. China's steelmakers have undergone major streamlining drives to curb overcapacity even as domestic demand remained strong. With seven of the world's top 10 producers now based in China, the country has emerged as a powerhouse in steel over veteran industry leaders like Japan.

Nikkei Asia | 9 July 2021

Global value chains have long formed the backbone of economic growth and trade, especially in East Asia. However, East Asia must not rest on its laurels and must continue to evolve. Low labor costs will always be attractive, but the quality of institutions, human capital and infrastructure can outweigh cost considerations when it comes to global value chain strategies.

Nikkei Asia | 14 June 2021

Swedish home furnishing retailing major IKEA will launch a programme in India, Poland and China, helping suppliers there transit to 100 per cent renewable electricity. Under this initiative, the company would invest and support nearly 1,600 direct suppliers. By switching to renewable electricity, these suppliers will save 670,000 tonne of emissions per year, which is equivalent to approx 3 per cent of the total climate footprint of the IKEA value chain.

The Economic Times | 11 June 2021

India happens to be the fourth largest-medical devices market in Asia and also holds the promise of the highest growth potential among all areas of the healthcare industry. Given this scenario the Indian medical devices industry has the prospect of becoming one of the biggest contributors to India’s health infrastructure, much the same way that the pharma industry has done.

The Times of India | 9 June 2021

Vietnam has successfully transformed into a manufacturing-oriented economy, supported by stronger global value chain participation following a rise in foreign direct investment, especially in the manufacturing industry. Over the past two decades, Vietnam's exports have diversified and grown exponentially, reaching USD 264 billion in 2019 — a 48-times increase from USD 5.5 billion in 1995 when it joined ASEAN.

VietnamNet.vn | 7 June 2021

The trade war between the United States and China and the COVID-19 pandemic have highlighted the vulnerability of complex global supply chains. These developments have prompted a re-evaluation of existing approaches to global sourcing and manufacturing activities to increase supply chain resilience and reduce external risks. It is not yet clear how China-centred supply chains have been affected. From preliminary evidence, the impact has not been uniform across industries. Instead, strategies of firms and industries may be heavily dependent on their relative ease of adjusting to external changes.

East Asia Forum | 27 May 2021

Foxconn is spearheading an entire class of electronics companies vying for a role in the carmaking industry. Pegatron, another Taiwanese company that began life making iPhones, is now assembling parts for electric cars for Tesla. Delta Electronics, a Taiwanese manufacturer of a wide range of power electronics components, makes EV charging modules and powertrains — the components that convert the engine’s power into movement. Their push into the automotive supply chain heralds a turning point in industrial history: the integration of two of the world’s largest industries — car manufacturing and electronics — which will both change beyond recognition.

FT.com | 17 May 2021

Guangzhou Automobile Group (GAC) is pressing ahead with plans to start manufacturing vehicles in Myanmar this year as part of the Chinese state-owned group's ambitious internationalization plan. According to industry experts, the Chinese domestic market is increasingly mature, forcing automakers to find new markets for their huge production capacity. Last year, GAC opened its first offshore factories in Nigeria and Tunisia, while signing a deal with a Malaysian assembler to explore the possibility of building and selling its vehicles there and in Vietnam.

Nikkei Asia | 22 April 2021

India has attempted to give an impetus to the manufacturing sector on multiple occasions in the last decade. In 2014 Prime Minister Narendra Modi launched the Make in India campaign in a bid to transform India into a global manufacturing hub. After the pandemic pushed India into its worst economic contraction since liberalisation in 1991, Modi, yet again, pitched India to become the world’s factory in an effort to capitalise on the United States-China trade war. These efforts have yielded little result with the share of manufacturing in GDP remaining stagnant at about 17%.

Scroll.in | 13 April 2021

Fashion has found itself caught in the political crosshairs between western and Chinese governments, forced to choose between the demands of human rights groups, western consumers and their own employees on the one hand, and the impulse to please China and its consumers in the world’s second-largest economy on the other.

FT.com | 9 April 2021

Decades of investment from wealthy economies into lower-cost locations have entrenched geographical shifts in manufacturing. Production of semiconductors — the essential components of our digital infrastructure, vehicles and devices — has steadily declined in the west, with East Asia emerging as the main manufacturing hub. The US’s share of global semiconductor manufacturing capacity fell from 37 per cent in 1990 to just 12 per cent last year, while Europe saw a 35 percentage point decline in the period, to 9 per cent. China’s mainland expanded its share from almost nothing to 15 per cent, a figure that is expected to rise to 24 per cent in the next decade.

FT.com | 24 March 2021

Brazilian jet maker Embraer, the world's top manufacturer of small passenger jets called regional jets, aims to expand its share in China. But China has its own homegrown aircraft maker, Commercial Aircraft Corp. of China (COMAC), and is keen to see the country's three major state-owned airlines use COMAC jets.

Nikkei Asia | 19 March 2021

Although having become a large manufacturer, China lacks the control of core technologies making up the top end of the global value chain. According to Miao Wei, former Minister of Industry and Information Technology, China remains heavily dependent on imports of basic components and technologies (over 50 percent come from abroad), integrated circuits (80 percent imported), large-scale and high-quality imports of castings and forgings (90 percent imported), and imports of high-end hydraulic parts and seals (100 percent dependent on imports).

China Briefing | 19 March 2021

Geely, China's largest private-sector automaker, has taken the first step toward becoming the Foxconn of electric vehicles. Geely and Foxconn, the Taiwanese Apple assembler, are establishing a 50-50 joint venture that will manufacture whole electric vehicles for clients as well as parts. Just like Foxconn did with iPhones, Geely will pursue an economy of scale through contract manufacturing. Foxconn brings its expertise in procuring components and ability to produce quality digital products. Geely will provide the auto making know-how.

Nikkei Asia | 10 March 2021

Marketed as "the people's commuting tool", the Wuling Hong Guang Mini EV has been a big hit for state-owned SAIC Motor, China's top automaker. SAIC holds a majority stake in SAIC-GM-Wuling, the joint venture that produces and sells the car and is known locally as Wuling, and General Motors is a major shareholder as well. The boxy compact can travel 120 km on a full charge and has a top speed of 100 kph.

Nikkei Asia | 13 February 2021

Indian auto companies witnessed a sharp recovery in earnings in the last quarter of 2020, as the festival season boosted sales despite an economic slowdown and rising cases of COVID-19. The top three auto manufacturers — Maruti Suzuki India, Tata Motors and Mahindra & Mahindra — all posted profits for the first time since the pandemic hit in early 2020. It was also the best financial performance by the automakers in seven quarters in terms of both revenue and net profit.

Nikkei Asia | 8 February 2021

The Chinese government has announced plans to expand the domestic market for electronic components to USD 327 billion by 2023, in its latest step to bolster the nation's tech sector amid a growing rivalry with the U.S. The announcement covers components, materials and manufacturing equipment used in such areas as smartphones, drones, 5G wireless, connected factories, electric vehicles, robotics, high-speed rail and aerospace. China aims to increase the market for these components by 20% between 2019 and 2023 under an action plan that involves the development of 15 globally competitive electronic components makers with 10 billion yuan or more in annual sales.

Nikkei Asia | 30 January 2021

Vietnam is moving to build a bigger digital economy, driven in part by semiconductor manufacturing, during the next five years and beyond as the Communist Party maps out a course that will take the country's economy to 2045. The digital economy’s contribution to gross domestic product is targeted to about 20% by 2025 and 30% by 2030. Making a shift to high-quality and value-added products is to play a major role in achieving the targets. Building a cluster of domestic chip industry is a potential move for Vietnam to climb up the value chain.

Nikkei Asia | 29 January 2021

Vingroup has unveiled a lineup of electric vehicles to gain a foothold in the American and European car markets. Vingroup subsidiary VinFast will produce three sport utility vehicle models that use artificial intelligence to run autopilot features such as steering, parking assistance and 3D mapping. Vingroup said it will start taking orders for the SUVs in November, with plans to deliver them to U.S., Canadian and European drivers in June 2022.

Nikkei Asia | 26 January 2021

Despite ongoing supply-chain shifts into Southeast Asia, the Asean economies that have been key beneficiaries will still be hard-pressed to compete with mainland China. The Asean Quad – Malaysia, the Philippines, Thailand and Vietnam – has built a dominant presence in niche segments of the electronics industry, such as office equipment in the Philippines, computers and radio equipment in Thailand, and telecom equipment in Vietnam. However, while these countries have a lot to offer, China retains a competitive edge and has achieved economies of scale across multiple electronics goods segments.

The Business Times | 13 January 2021