- The number of automotive manufacturing projects globally has more than trebled in Q121 compared with Q120 when the industry was tackling the Covid-19 outbreak.
- Asia has seen the biggest increase in the number and value of projects compared with Q120, which can be partly attributed to the region experiencing the disruption of the pandemic earlier than other regions.
- The addition of the segment of the industry that the investment projects fall into has enabled us to identify that component manufacturers were the most active in Q121.
An aggregation of our regional automotive manufacturing investment round-ups for Q121 shows there were 133 projects captured during the period, compared with 44 in Q120. It is not surprising to see such a big increase in Q121 as it is compared to Q120 when autos companies were focused on managing their existing business in the face of the Covid-19 outbreak and new investment was less of a priority. As such, all regions except the Middle East and North Africa (MENA) and Sub-Saharan Africa (SSA) saw an increase in the number of projects in Q121. In MENA the number stayed the same at three projects in both quarters and in SSA the number fell to just one project from four in Q120. The biggest positive difference came in Asia where there were 41 more projects than in Q120. Asia also had the highest total number of projects with 48, and the heat map below shows that in terms of individual markets, China, the US and Russia were the standout winners for investment in Q121, with 18, 17 and 15 projects respectively.
Russia Sees Uptick In Investment Activity
Global - Autos Production Investment Heat Map, Number Of Projects
Source: Fitch Solutions
The global value of projects with financial details announced also increased significantly in Q121 to USD42.2bn, compared with USD6.8bn in Q120. As with the number of projects, the biggest increase in investment value was in Asia where the combined project value increased to USD20.0bn, from USD1.4bn in Q120, giving the region the highest value ahead of second-placed Western Europe with USD8.9bn. All regions saw an increase in the value of their combined projects. Despite having just one project in SSA in Q121, the USD1bn value was four times higher than the combined USD216mn registered in Q120.
Asia Leads Investment Increase
Global - Investment Value By Region, USDmn
Source: Fitch Solutions
In terms of geographical split, Asia had the highest share of the number of projects in Q121 with 36.1% which is a marked increase from 15.9% in Q120, although this can be explained by the autos industry in Asia feeling the impact of the Covid-19 pandemic earlier than other regions in 2020. It also had the biggest share of the global investment value in Q121 with 47.4%, up from 20.3% in Q120. These increases have largely been at the expense of Western Europe, which claimed the biggest share of both the number and value of projects in Q120, but in Q121 had the fifth biggest share of the number of projects (9.8%) and second biggest share of the total value with 21.1%. This represented the biggest downward move as Western Europe claimed 55.0% of the total value of investments in Q120.
New Categories Add To Depth Of Themes
For Q121 we added a new indicator to our round-ups, tracking the segment of the industry that the investment falls into, namely passenger vehicles (PVs), commercial vehicles (CVs), motorcycles, components, electric vehicles (EVs) and EV supply chain. This enables us to better filter the projects and identify themes based on the areas of the industry they target. For example, in Q121, the biggest number of projects fell in the 'components' category, which suggests automotive suppliers were particularly active.
Suppliers Most Active In Q121
Number Of Projects By Industry Segment (Q121)
Source: Fitch Solutions
This also enables us to track segments that we have particular views on, such as the EV supply chain. One of our key themes for 2021 is that the EV supply chain will become increasingly politicised and we will see a diversification away from Asia, and China in particular. In Q121, Asia still accounted for the largest number of battery-related investments with 13 and the biggest share of global investment in the battery supply chain with 44.5%, which tells us that despite the diversification push, Asia still plays a prominent role. However, we will now be able to track this on a quarterly basis and have also broken out battery investment into its own round-up.
This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings. Copyright © 2021 Fitch Solutions Group Limited. © Fitch Solutions Group Limited All rights reserved. 30 North Colonnade, London E14 5GN, UK.