Myla Motors will start production in Russia with lean logistics strategy
The Russian market will see the introduction of an entirely new car brand at the end of this year from a new plant opening in Tartarstan. Myla Motors, founded in 2005 by John Mylonas (pictured), a former General Motors executive, is slated to begin production this year with an initial capacity of 40,000 units per year. Mylonas said that a lean logistics strategy would be the most important focus point of his plant’s efficiency.
Mylonas, who had various roles in production, purchasing and logistics for GM, including responsibility for starting production at the GM-Avtovas joint venture in Togliatti, told delegates at the Automotive Logistics Russia conference last week in Moscow that he was building his production around a kanban system, small-lot, modular packaging and a low-inventory supply chain that would see just two shifts worth of material at the factory. A lead logistics provider will be based at the factory.
“The single most important element of efficient production is logistics,” he said. “At our company, it is not the sales guys or the finance people who lead the company, but the logistics management.”
Material and CKD parts will be imported mainly from China and Japan, Mylonas said. One ship a week will collect material from Hokkaido, Japan and Ningbo, China and move to the Black Sea port of Novorossiysk, Russia, where it will be trucked to Tartarstan. For expedited material, Mylonas said that Myla Motors would transfer freight to the Trans-Siberian railway from Nahodka in far eastern Russia.
Material will also be brought in by truck directly from Germany, Poland and within Russia, Mylonas said.
He admitted, however, that logistics remain a significant challenge in Russia. In particular, he pointed to the need for reform in the country’s banking system–which makes international payments difficult–as well as customs.
Mylonas revealed that he had invested just €30m to build a capacity of 40,000 units a year, and that you would increase capacity to 80,000 units with another €10m. In comparison, Volkswagen has invested €775m in its Kaluga factory southeast of Moscow, which has capacity for up to 180,000 units.
“[VW is] a giant and I am a minnow. But logistics will be my only advantage,” he said.
A full report from Automotive Logistics Russia can be found here:
Mazda to import compacts to Brazil
Mazda will begin importing vehicles to Brazil from Japan from April next year through a new sales company established with Sumitomo Corporation. Sales are expected to begin in the second half of the year.
Mazda will invest a 70% share in Mazda Motor do Brasil Limitada, which will be based in Sao Paolo, with Sumitomo investing the remaining 30%.
The new company will handle imports while Mazda builds its new production facility with Sumitomo in Mexico. That facility, to be situated in Salamanca city, Guanajuato state, will function as a compact vehicle manufacturing hub mainly for Central and South America, and will include both vehicle and engine assembly plants.
Takashi Yamanouchi, Mazda's representative director, president and CEO, said: "Since Mazda entered the Mexican market in October 2005, our sales results have steadily improved, and in 2010 we set a new record for both sales volume and market share. Building on this success, and by leveraging Sumitomo Corporation's extensive experience and knowledge of emerging markets, we will continue to strengthen our business in Mexico and throughout Central and South America, including the rapidly growing Brazilian market. These initiatives are part of Mazda's plans to achieve its mid- to long-term goals for emerging markets."
Mazda and Sumitomo plan start manufacturing in fiscal year 2013 with an annual production capacity of 140,000 units. The company said it would announce
specific carlines that will be available in Brazil at a later date but the facility is expected to produce Mazda2 and Mazda3 models.
The new sales mark a return to Brazil for Mazda after 11 years. The carmaker last sold vehicles in the country in 2000 following a ten-year presence which saw annual sales around 1,000 units.
Mazda recently announced it would end production of the Mazda6 mid-size sedan at its US joint venture facility with Ford in Michigan – AutoAlliance International. The company is moving production of its next-generation sedan back to Japan. The company stated as part of a restructuring of global production Mazda cars sold in the US would be shipped from Japan and Mexico, starting around 2013. Read more here.
Initially the Mexican plant will not be able export to the US because of local content requirements stipulated in the North American Free Trade Agreement but Mazda said it will consider US shipments from Mexico in the long term.
Le Havre launches Ro-Ro Max project
The French port of Le Havre is aiming to boost its finished vehicle throughput to 500,000 by 2015 with the launch of a project to establish 100ha of new infrastructure that will include intermodal facilities, value-added services, and standardised customs and administrative processes.
Called the ‘Ro-Ro Max’ project and supported by national government and the Upper Normandy region, it will bring together logistics providers, stevedores, yard operators and engineering schools to make Le Havre a "port of reference for all players in the automotive world".
The port handled 340,000 new vehicles on its existing 70ha terminal last year and saw a 9% increase in ro-ro activity at the beginning of the year over the same period in 2010.
Now the port aims are to optimise and grow ro-ro terminal activity with, among other things, better management of physical flows and administrative processes. The project also aims to offer new services to clients, using innovative technologies and the development of infrastructure, as well as develop the automotive supply chain.
It will also improve the accommodation of ships at the port for both short- and deep-sea routes and develop facilities catering for barge traffic from the river Seine Artery.
Research projects are tabled to run until the end of 2012 when development will begin based on the findings.
Cosco vessel leaves China for South America
Cosco Group’s 5,000-capacity car carrier MV Cosco Tengfei left Shanghai's Waigaoqiao port in the Pudong New Area last weekend with a shipment of more than 4,400 vehicles destined for Santos in Brazil.
Following the 28-day journey the vehicles, manufactured by Chery Automobile, Anhui Jianghuai Automobile (JAC), Sany Heavy Industry and Lonking Holdings, will be distributed in the South American market. It is the second such delivery by a Cosco vessel of this size following a successful shipment by MV Cosco Shengshi in February.
According to JAC, South America has become the company's most important export destination, and currently accounts for more than half of the Anhui-based company's total export volume.
Designed by the Shanghai Design Institute and manufactured at Cosco's Zhoushan shipyard south of Shanghai, Cosco Tengfei and Cosco Shengshi will deliver Chinese-made cars to South American countries and pick up European cars on the return trip.
VW hits 3m deliveries to May
Volkswagen Group has pushed deliveries up by more than 14% between January and May this year to deliver 3.37m vehicles.
“We are very pleased with developments during the first five months of this year. The Volkswagen Group with its very convincing model range is benefiting from brisk demand on global automobile markets,” said Group board member for Sales, Christian Klingler.
Overall, the Group brands delivered 1.56m vehicles throughout Europe in the first five months (+9.6%), while deliveries on the American continent also increased. The number of vehicles sold in the North America region grew 19.7% in the period to 261,600 units, of which 172,400 vehicles were delivered in the US market. VW handed over 376,800 (+9.3%) vehicles to customers in the South America region during the same period.
The Group also reported a significant rise in deliveries in the Asia/Pacific region, with 1.04m vehicles delivered, up 21.6% and saw a robust increase in the fast growing India market, where 46,200 vehicles were delivered, an increase of 242%.