Mercedes-Benz is in discussions with its leading suppliers to explore the creation of rare earth stockpiles, as the automaker moves to strengthen its supply chain resilience amid mounting concerns over global shortages.
The initiative comes despite Mercedes-Benz not currently facing disruptions from the rare earth shortage that has forced several automotive suppliers to halt production. The carmaker said the move is part of broader efforts to avoid supply chain shocks, taking cues from lessons learned during the semiconductor crisis.
“We have learnt a lot from the semiconductor situation in the automotive industry and are constantly … looking at what risk portfolio we still have in the supply chain,” said Joerg Burzer, Mercedes-Benz’s board member in charge of production, during a roundtable with journalists.
Burzer added that the company was working closely with suppliers at all levels to assess the best strategies for risk mitigation. “We are of course in constant dialogue with our suppliers and of course we also discuss with them what the best tool is for risk management and the topic of physical buffers naturally plays a role here,” he said.
Earlier on Wednesday, the European Association of Automotive Suppliers (CLEPA) reported that a number of plants and production lines had shut down due to limited availability of rare earths. The group linked the disruptions to China’s recent export restrictions, warning that further outages could follow.
While Mercedes-Benz has so far remained unaffected, Burzer emphasized the importance of proactive planning. He noted the company was maintaining open lines of communication with its tier 1, tier 2 and tier 3 suppliers to monitor developments and respond accordingly.
Source: Reuters