CRA Market & Product News
Resources are tight and everyone is yelling, as the North American auto industry prepares for the effects of yet another material shortage on the horizon, this time it’s rubber.
Automakers are growing concerned by the increasing scarcity of rubber in the automotive market, following a year of shipping disruptions, disease in rubber-producing trees and an extensive stockpiling campaign on the part of China, taking advantage of the low prices offered by nearby Thailand, the world’s biggest rubber producing nation.
“It’s like paper towels early on during the COVID crisis,” said Steve Wybo, senior managing director at Conway MacKenzie, a consulting firm outside Detroit.
“If you can get your hands on some plastic, or some rubber, you’re going to order more than you need because you don’t know when you’re going to be able to get it next.”
For manufacturers south of the border, the effects are already being felt.
“I’ve got everybody alerted that I’ll take materials as fast as they can get it to me,” said Gary Busch, director of global procurement at Carlstar Group, which makes tires for off-road and agriculture vehicles.
“It’s definitely tightening up,” said Ann Marie Uetz, a Detroit-based partner at law firm Foley and Lardner LLP, which represents auto parts manufacturers.
“It’s nowhere near the level of the chip shortage from our perspective so far, but it’s definitely brewing.”
Article Credit to Collision Repair Magazine.
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