Nemak (NEMAKA), Mexico's leading aluminum automotive parts manufacturer, announced adjustments to its production plans for electric vehicle (EV) shells in response to the pressure on production capacity caused by the global slowdown in EV demand.
Nemak had originally planned to advance an $1.1 billion investment initiative through its facilities in Mexico and Germany, focusing on the production of electric vehicle shells and other components. This investment was expected to generate annual revenues of $1.57 billion and boost the production capacity for EV parts. However, the cooling global demand for electric vehicles has forced the company to reassess this strategy. According to a report by the International Energy Agency (IEA), the demand for EVs in key markets such as Germany, Italy, Japan, and South Korea decreased in the first to third quarters of 2024, with a 1.7% year-on-year decline in EV sales in Europe. In addition, major automakers such as Toyota, Mercedes-Benz, and Stellantis have also indicated that they may revise their EV sales forecasts downwards. In light of these factors, Nemak has adjusted its electric vehicle production plans with automakers such as Volvo and Ford in order to reduce its investment risks in the EV sector.
After further market analysis, Nemak made corresponding adjustments to its EV production plans with customers like Volvo and Ford. In a statement released to the Mexican Stock Exchange (BMV), the company explained that the strategic change aims to better align with the evolving market and customer demands. This means that Nemak will place more emphasis on the efficient allocation of resources, prioritize innovation projects and market growth, and improve the utilization of existing assets. Nemak's CEO, Armando Tamez Martinez, emphasized that the company's strategic adjustments are designed to maintain flexibility, ensuring that the company can make timely and effective strategic responses in a complex market environment.
Nemak's strategic adjustments reflect the reality of a slowdown in global EV demand, signaling that the global automotive parts industry may be entering a more uncertain phase, where parts suppliers must adapt flexibly to market fluctuations. For Chinese companies, this shift means that the global EV supply chain may undergo restructuring and optimization, particularly in the European and North American markets, where the demand slowdown may lead to a reduction in the procurement of EV parts. This presents higher demands for Chinese companies, especially EV parts suppliers — they need to adjust production strategies, reduce risks, and improve supply chain efficiency in response to global market changes. Emphasis should be placed on innovation and R&D, as well as improving production flexibility, to maintain competitiveness and seize new growth opportunities within the global supply chain restructuring.