Connect with us

What are you looking for?

SUPPLY CHAIN

Asian Manufacturers Face Supply Challenges from Shortages

We look at how manufacturers in Asia, including Toyota and Honda, have faced supply chain challenges due to various materials shortages and Covid-19

As companies experienced a positive recovery in May, factories in Asia continued to experience growth, despite the rising costs of raw materials and Covid-19 supply chain restraints. As the situation worsens in India, thanks to the spread of the Indian coronavirus variant, the rising rates of infection are seemingly causing Asia’s supply chain network disruptions.

Covid-19 causes Fluctuation in Supply Chain

Industries in Asia had a successful growth last month, as shown by the purchasing managers’ indexes in different countries:

  • China’s official PMI reduced slightly in May as raw material costs surged.
  • The increased infection rates in India resulted in its lowest factory activity growth in the past 10 months.
  • Taiwan’s PMI slows to 62.0 as the country’s infection cases rise – its PMI still well above the 50-mark, which differentiates growth from regression.
  • Vietnam’s PMI remains above the 50-mark but has reduced from 54.7 to 53.1 in May.
  • South Korea’s PMI slowed from April to 53.7 while sustaining growth for an eighth month.
  • Japan’s au Jibun Bank PMI was reduced by 0.6 to 53.0 in May.

According to Toru Nishihama, Chief Economist at Dai-ichi Life Research Institute, “A spread of new variants is already having a negative impact on supply chains. If this situation persists, it will hit Asian manufacturers that have been scrambling to diversify supply chains out of China.” He also said, “Asia’s recovery has been driven more by external than domestic demand. If companies have trouble exporting enough goods, that bodes ill for the region’s economies.”

The Supply Chain Setbacks

The Covid-19 pandemic imposed significant restraints on supply chains. Also added to the mix, a global chip shortage and continuously increasing prices of raw materials create significant barriers for growth.

Japanese automotive manufacturers Toyota Motor and Honda Motor have suspended exports to Malaysia due to the restrictions imposed on the region to curb the spread of the Indian coronavirus variant.

In efforts to rebuild areas, which have been hit hard by the pandemic, Japanese companies plan to cut their spending on plant machinery and equipment – this makes for a 12-month trend. Meanwhile, South Korea has recorded its most significant peak in productivity in 32 years, aided by the increasing consumer demand as economies reopen across the globe.

Scdigital

CORPORATE

Vietnamese conglomerate Vingroup will develop a vaccine factory with an annual capacity of 100-200 million doses in Hoa Lac Hi-Tech Park in Hanoi. This...

CORPORATE

Vietnam’s conglomerate VinGroup announced on July 27 that it has appointed Michael Lohscheller as CEO of its automotive division VinFast Global. Lohscheller, who used...

ECONOMY

Vietnam’s electronics industry has been affected by the pandemic, a trend that could increase global chip shortages and lower electronics output. Vietnam has four...

ECONOMY

After the first year in effect, the EU-Vietnam Free Trade Agreement brought about remarkable achievements even in the midst of an unprecedented global pandemic....

Scroll Up