JAKARTA General Motors (GM) reportedly asked thousands of its suppliers to stop using components and materials originating from China. The move is part of the company's new strategy in strengthening supply chain resilience, while reducing the risks that arise due to geopolitical dynamics.
Reporting from Carscoops, Friday, November 14, it turns out that the request was starting to be submitted by GM to several suppliers by the end of 2024. The automotive manufacturer from the United States then set an initial target of removing all content from China from vehicles produced in North America starting in early 2027.
For many suppliers, the deadline is considered quite challenging considering the automotive industry's supply chain has been built for decades with a large dependence on factories and raw materials from China.
Global Procurement Director GM Edgepan Amin, said that supply chain disruptions in recent years have prompted companies to shift from dependence solely on low-cost countries.
According to him, supply stability is a long-term goal that can no longer rely on one country dominantly. Meanwhile, a number of industry players said that this effort was not easy to realize.
Head of Collin Shaw's Vehicle Suppliers Association, said major changes in the supply chain that for two to three decades relying on China would not happen quickly. Many suppliers and sub-pemasok are considered to be still bound in complex structures, thus moving sources of raw or production materials will take time, investment costs, and a new verification process.
GM's move is also said to focus not only on components from China. The company is considering tightening supply from several other countries such as Russia and Venezuela as part of a diversified strategy. These challenges make suppliers have to prepare for the possibility of relocation, operation adjustment, or the risk of contract loss if they cannot meet the company's demand.
Even so, GM seems to want to ensure that vehicles produced in North America have a safer supply chain and are resistant to global turmoil. This effort also shows changes in the direction of the automotive industry which is starting to place geopolitical issues as an important part of long-term planning.
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