This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. 

Key developments

Market Trends and Regulatory

• Retail sales of passenger cars in China declined by 14.7% in August, representing a third consecutive month of sales declines following a drop of 6.2% in July and 5.1% in June, compared with the same period one year ago.  The sales decline is attributed to reduced production caused by supply shortages, including the impact of elevated COVID-19 cases on Malaysia’s semiconductor packing and testing facilities.
• Malaysian semiconductor company Unisem will close certain plants for seven days after three of its employees died from COVID-19.  The packaging and testing services company plans to limit staff numbers when the facilities reopen.  Approximately 12% of Unisem’s revenue is from the auto industry.
• Automakers, including GM, Ford, Volvo, BMW and Audi, have set target dates to reach certain levels of recyclable or sustainable content in their vehicles.  In some instances, automakers have switched suppliers that could not meet recycling standards. 
• A group of Republican lawmakers on the Energy and Commerce Committee expressed concern over U.S. approval for Huawei to purchase chips for its automotive components business.  Huawei is subject to U.S. trade restrictions on the sale of chips and components for use in smartphones and other network devices.   

OEMs/Suppliers

• Production impact of the semiconductor shortage – GM will extend downtime at five North American plants in Michigan, Missouri and Mexico that produce crossovers, sedans and midsize pickups.  GM’s full-size pickup and SUV plants in Fort Wayne, Indiana; Silao, Mexico; Flint, Michigan; and Arlington, Texas are scheduled to resume production the week of September 13. Stellantis will extend downtime by two weeks at its Jeep Cherokee plant in Belvidere, Illinois, and its minivan plant in Windsor, Ontario.
• Ford will stop manufacturing cars in India, following a struggle to achieve growth in a market dominated by low-cost vehicles made by competitors such as Suzuki and Hyundai.  Ford has experienced over $2 billion in operating losses in India over the last decade, and CEO Jim Farley has indicated that the automaker will avoid investing in markets that provide limited return.
• Qualcomm is reported to have made a bid of over $4 billion to acquire automotive safety technology company Veoneer, surpassing a previous offer by Magna. 
• ZF employees in Marysville, Michigan, began a strike on September 9 over a dispute related to union recognition. The volume of workers participating in the strike was not readily available, and the supplier noted that production was not impacted. 
• Ford named a former Apple and Tesla executive as its new advanced technology and embedded systems officer.  Doug Field will report to President and CEO Jim Farley, and will lead efforts to deliver smart, connected vehicles and related services.

Connected/Autonomous Vehicles and Mobility Services

• Intel subsidiary Mobileye will begin testing an autonomous taxi service in Munich next year, operated in partnership with German rental car company Sixt and Israeli mobility data startup Moovit.
• General Motors' venture capital arm invested an undisclosed amount in Oculii, a developer of imaging radar software for use in autonomous vehicles.

Electric Vehicles and Low Emissions Technology

• Toyota and Honda disagree with a House proposal to provide an additional $4,500 in tax incentives for electric vehicles that are union-made in the U.S., noting that the plan would discriminate against autoworkers based on whether they are unionized. 
• The Senate’s $1 trillion bipartisan infrastructure bill could lead to increased funding for electric and low-emissions school buses. The U.S. House of Representatives previously agreed to vote on the bill by September 27; however this pledge is non-binding and the bill is expected to face significant opposition. 
• German automakers could potentially view sales in the U.S. as a method to offset the costs of electrification in their domestic market, as signaled by the emphasis on sustainability and zero emissions at the International Motor Show in Munich last week.

Prepared by Julie Dautermann, Competitive Intelligence Analyst

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