Suzuki Swift Hybrid Production STOPPED Because Of China
Suzuki has reportedly stopped the production of the Swift hatchback in Japan, due to the latest export restrictions on rare-earth metals by the Chinese government. The carmaker had previously announced a planned production stoppage from May 26 through June 6 citing a shortage of components. It did not, however, elaborate any further and the spokesperson made it clear that the company had no comment on the reason for production-halt. Now Nikkei Business Daily has learnt from sources familiar with the matter that the stoppage comes as an aftermath of the Chinese curb on exports.
Chinese Export Curbs: The Back Story
China and the United States have recently been involved in a fierce trade war. The U.S. President Donald Trump recently announced a series of reforms which made tariffs on Chinese import shoot up. While the average figure stood at around 145%, tariff on some goods went up to 245%! Clearly, these taxes meant death to many exports.
The Chinese government soon retaliated with counter-tariffs and other measures. One of these was a strict curb on the exports of rare-earth metals- which China has in plenty. These are crucial in making electric motors, and other electrical components. Most of the electric and hybrid vehicles use components made of these. This also explains why China continues to lead the EV game globally, and how they manage to pull off unbelievable prices for their EVs.
In early April, China’s Ministry of Commerce announced export restrictions on several rare-earth metals and magnets which are widely used in the automotive and defence sectors. Interestingly, some of the affected metals are even used in the production of ICE (Internal combustion engine) vehicles as well. Many component manufacturers reportedly had to shut down operations, following the announcement.
Suzuki Takes The Hit!
Unfortunately, Suzuki has become the first Japanese automaker to be directly affected by these export controls. It sells hybrid versions of the Swift in Japan which excel with their fuel efficiencies. These use components made of rare-earth metals, and were obviously affected by the curbs. Reports say that the procurement of parts was delayed as China has been slow to issue export licenses.
However, stopping the production of these alone would have reduced the efficiency of the production line. This should have made the carmaker stop producing all versions of the Swift, except the Sport.
At this point, Suzuki's hybrid game plan for the future stands uncertain. The carmaker has reportedly been working on an affordable range of series hybrid vehicles, which could potentially revolutionise markets like India. These would use the petrol engine as the generator for the battery pack and will thus offer excellent range figures. The Swift was known to be among the first to get this technology in India.
The Chinese export restrictions could bring about huge delays in the development and launch of these products in markets like India.
The Impact Will Soon Be Global
If Beijing continues with these restrictions, we could soon see other manufacturers getting affected as well. The effects of the Chinese restrictions can already be seen in the US and European markets. In May, Ford had to temporarily halt the Explorer's production at its Chicago plant. Some European automakers have also suspended their outputs due to component shortage.
In addition to the automotive sector, the export restrictions have adversely affected sectors like aerospace, defence and semiconductor manufacturing.