This issue features our first ‘double bill’ cover, with interviews across Volkswagen in North America (p16), and Fiat in Latin America (p26). Each of these stories, carved into their smaller halves, warrants its own cover.

Volkswagen's return to US production is historic, while its Mexican growth – even before adding a new Audi plant – has been astonishing. Likewise, Fiat’s expansion in Brazil, let alone all of Latin America, is likely to make it the Italian brand’s largest production centre.
Together, the carmakers in these regions represent annual production of nearly 2m units, with supply and manufacturing networks the length of the Western Hemisphere and global links to every other continent.

Putting both OEMs into the spotlight in North and South America also highlights a number of trends in the ever-changing supply chain. Not only does each story represent a European carmaker thriving outside struggling home markets, but the shape of each production network contrasts sharply with its European counterpart. Try to consolidate material flows to Volkswagen’s two North American plants, each about 3,000km apart, and you’ll quickly discover that you’re not in Lower Saxony anymore. There is limited scope to integrate the supply chain here, even with each plant consuming plenty of material from across the other side of the border (and paying for empty return flows in the opposite direction, too).

Likewise, Fiat in Latin America does not resemble the consolidated networks in Italy and Poland. Its new Brazilian plant in Goiana, in the state of Pernambuco, will be more than 2,100km northeast from its current massive engine and assembly plant in Betim, Minas Gerais state.

Despite these sprawling supply chains, both OEMs successfully manage long distance material flow while nurturing the local supply base. Both use important consolidation hubs across the Americas to collect supplies, and have established complex cross-shipping networks for parts moving both ways across the Atlantic. At the same time, the NAFTA region dominates Volkswagen’s supply chain, while the growth of Fiat’s suppliers in Minas Gerais state has even become an expression – Minierização.

Both supply chains in the Americas serve as case studies for manufacturers or providers expanding beyond the production and supply poles in Europe, as these vast continental challenges might foreshadow those still to come in China or India.

Christopher Ludwig,
Editor tel: +44 (0)20 8987 0968