PA-12 — the unknown chemical which could make cars more expensive
BERLIN, April 21 — Building cars is a tricky business — each one has around 3,000 individual components, and it takes a supply chain genius to make sure that the right amount is in the right place at the right time.
To keep costs to a minimum, cars have been built on a “just-in-time” basis for years now, meaning that room for manoeuvre is tight when something goes wrong, as it did at the end of March.
The explosion in a small German factory didn’t make international headlines then, but it’s beginning to now, because that factory produced what’s estimated to be between a quarter and a half of the world’s supply of PA-12, a resin used in vehicle braking and fuel systems.
Evonik Industries, the firm which owns the plant, believes it’ll take months before it can return to production, giving the world’s automakers a serious headache.
This week, the giants of Detroit and their international counterparts met in Michigan to discuss the problem, which has the potential to seriously slow the global production of vehicles.
That in turn, would lead to cars drying up at the world’s showrooms, which would likely drive up prices — or at least significantly diminish the discounts out there available for consumers.
The outcome of the meeting in Detroit, known as the Automotive Industry Action Group (AGIP), gave the impression that it’s too early to tell what the effect yet could be, say analysts — though everyone’s pretty much in agreement that it’s unlikely to be good.
“The statement released after the meeting would indicate that their options in tackling the crisis may be somewhat limited,” noted automotive analyst IHS.
“As such, the potential for significant disruption to the global automotive production network cannot be ruled at this stage.” — AFP-Relaxnews