Insights into the New Manufacturing Locations

Selected business news articles on global production

Taiwan produces a major share of the world's electronics products, and its exports are equivalent to around 70 per cent of the country's overall economy. Factories around the island make ships found in most popular consumer electronics, many of which are themselves manufactured by other Taiwanese groups. The country, however, has struggled with weak consumer demand in the US and Europe and with rising competition from Korean and Chinese producers.

FT.com | 31 October 2013

After the Rana Plaza clothing factory collapsed in April (2013), killing at least 1 100 people, the big Western clothing companies that have their garments run up in Bangladesh came under pressure to improve safety and working conditions in the workshops they buy from. However, it has also become clearer that clothing firms have little option but to continue sending work to Bangladesh. It will remain Asia's primary production base outside China for cheap clobber.

The Economist | 26 October 2013

When Mexico set up the first maquiladoras half a century ago, they were sweatshops that simply bolted or stiched together imported parts, then exported the assembled product north across the border to the United States. Now, with competition growing from other low-cost locations, the maquiladoras are having to step up their efforts to become innovative. The next logical step is to get involved in design and development.

The Economist | 26 October 2013

The Asean nations such as Indonesia, Malaysia and Thailand form one of the regional "clusters" that, according to a leading consultant, should be on the growth list of every carmaker and supplier. For players in Europe, the US, and Japan, geographic diversification has never mattered more than it does today in order to balance local economic storms. So far, Japanese companies have led the way, rolling out low-cost models in countries with increasing average incomes, rising aspirations and low car ownership levels.

FT.com | 6 October 2013

India is the the world's third largest textile and garment exporter, after China and the EU. Despite the country's vast, young labour force, India's garment industry has struggled to realise its potential, burdened by crippling power shortages, poor infrastructure, high worker turnover and fragmentation. Recruiting workers remain a big challenge. Since housing in big cities where larger factories are located is expensive, the provision of workers' dorms is considered an opportunity. India's government is also planning integrated textile parks with designated space for worker housing.

FT.com | 25 July 2013

Kaluga, a city southwest of Moscow, is today a thriving centre of automotive production, comprising companies such as Volkswagen, Volvo Trucks, Peugeot-Citroen and Mitsubishi. According to company representatives, the city benefits from a business-oriented administration. Also, when a cluster of producers is created in a single region, there are useful synergies: "You get a critical mass of skilled workers and the associated benefits of training and supply-chain infrastructure. You attract a skill base."

FT.com | 26 June 2013

Better integration of Mexico's manufacturing and innovation prowess into America's is a win-win. It makes U.S. companies more profitable and competitive, and it gives Mexicans a reason to stay home. Mexico has signed 44 free trade agreements, which is more than twice as many as China and four times more than Brazil. Mexico has also increased the number of engineers and skilled laborers graduating. Put that together with rising wage and transportation costs in China, and it is no surprise that Mexico now is taking manufacturing market share back from Asia.

The New York Times | 23 February 2013

China's working-age population shrank in 2012, marking the beginning of a trend that will accelerate over the next two decades and have profound implications for the world's second-largest economy. Many analysts fear that China's aging workforce, further distorted by the country's one-child policy introduced in the late 1970s, could become a big drag on future growth. According to a Credit Suisse economist, "wage increases, more automation and production of better-quality products are all likely to become stronger structural trends in China".

FT.com | 18 January 2013

Today's emerging economies face a different sort of globalisation than their predecessors 50 or 100 years ago. According to Richard Baldwin of the Graduate Institute in Geneva, most advanced economies industrialised as part of globalisation's first great unbundling – the geographical separation of producers and consumers. In the 1980s, a new model began to emerge – the second unbundling, breaking up production entirely across long, multinational supply chains. That made industrialisation a cakewalk with a business-friendly government and cheap workers often being sufficient to get started.

The Economist | 4 August 2012

Mexico remains a far more popular destination than the US for "reshoring" manufacturing to supply North American demand, according to research by a business advisory firm. Nearly half the manufacturers surveyed said they saw reshoring as a good opportunity, but half also said Mexico was their top choice for relocating factories designed to supply the US market. "Mexico still remains the near-shore locale of choice for companies looking to overcome the higher costs of doing business today in places like China.

FT.com | 3 June 2012

With China’s experienced workforce, well-developed supply chain and vast scale, few people believe its position as the world’s workshop is under threat. But spiralling wage costs in China have driven a growing number of labour-intensive manufacturers to switch to countries with lower wages, such as Bangladesh, Indonesia and Vietnam. And while Vietnam’s infrastructure cannot compare with its much wealthier northern neighbour, factory managers say that they can cope with both the occasional power cuts and delays at Vietnam’s under-developed ports

FT.com | 14 March 2012

China is the world's largest manufacturing power, accounting for a fifth of global manufacturing. But the era of cheap China may be drawing to a close. Costs are soaring, starting in the costal provinces where factories have historically clustered. Increases in land prices, environmental and safety regulations and taxes all play a part. The biggest factor, though, is labour. But, coastal China has enduring strengths despite soaring costs – it is close to the booming Chinese domestic market, Chinese productivity is rising fast, and China's supply chain is sophisticated and supple.

The Economist | 10 March 2012

A USD 500m investment programme in South Africa will enable Ford to ship vehicles to Europe for the first time. For South Africa, where manufacturing is often dogged by complaints about a poorly skilled workforce and rigid labour laws, the investment reflects a vote of confidence. The expansion, bolstered by South Africa's free trade agreement with Europe, will increase Ford's local vehicle production capacity to 110 000 a year, while engine production will rise to 120 000.

FT.com | 6 July 2011

Chinese companies are preparing for a wave of investments in Europe in engineering and technology as part of an effort to find new markets and gain greater control of supply chains. This comes amid exhortions from Beijing encouraging Chines companies to "go global" and put down roots overseas rather than rely on exports. The Chinese groups are targeting businesses with expertise in machinery, materials and specialised components, fields where many European businesses occupy strong positions.

FT.com | 25 April 2011

At the upcoming Shanghai car show, General Motors and PSA Peugeot Citroen will launch global models for the first time in China, a symbol of how the car industry's center of gravity continues to shift to the mainland, the largest car market. Chinese tastes are increasingly influencing the design of cars driven not just in China, but around the world. This is in line with the governments objective of transforming China from the world's sweatshop to its design studio, with its increasing focus on encouraging innovation rather than mere copying of Western products.

FT.com | 18 April 2011