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19. 01. 2024

7 min read

Overview of the 3 leading publicly traded automakers by revenue in 2023

The automotive sector plays a crucial role in constantly shifting global economic landscape, significantly impacting market dynamics. Despite its influence, the automotive industry is particularly susceptible to a number of operational challenges. In this analysis, Semantic Visions provide a deep dive into these challenges in relation to the top three publicly traded automakers by revenue – Volkswagen, Toyota, and Ford, who faced considerable disruptions in 2023.

Representative Disruption Events in the Automotive Sector for the Top Three Companies

Our advanced AI/ML driven systems and robust methodology allows us to collect extensive global news data to extract crucial insights that have a significant impact on client operations and ultimately to shareholder value. We will delve into significant events in 2023 that affected Volkswagen, Toyota and Ford, the top 3 automotive manufacturers by revenue. Semantic Visions collects and analyzes information from hundreds of thousands of diverse global news sources in 12 unique languages enabling us to offer near real time visibility into the impact of the disruption on these industry titans.  

Volkswagen     

Article volume trend:

  • Discontinuity

Volkswagen’s operations encountered 28 disruptive events. A major September 28, 2023 event involved an extensive IT outage, resulting in a drop in the stock price as a consequence. This technological disruption led to a temporary halt in production at several Volkswagen brand plants, notably Emden, Zwickau, Osnabrück, and Wolfsburg, and also impacted Audi. The issue was resolved overnight, allowing global production to resume, although some systems may have continued to experience residual effects. This event happened alongside Volkswagen’s strategy to reduce shifts at two German factories, a decision linked to declining demand for certain electric models.

  • Supplier Problems

Volkswagen faced 27 events related to supplier challenges. On April 5, 2023, a significant development at Volkswagen AG saw them being forced to discontinue sales of the ID.4 electric SUV in the US and Canada. As reflected in the stock price chart, there was a drop in the share price during that period. This action was in response to a risk of doors opening while the vehicles were in motion, affecting nearly 18,000 units. The problem, caused by water leakage in the door handles, necessitated a recall.

  • Shortages

Volkswagen experienced 18 events concerning shortages. Notably, on February 8, 2023, the company were forced to freeze orders for the Golf R hatch and wagon in Australia due to component shortages, a problem that also affected the Tiguan R SUV. Consequently, the stock price was negatively affected during this period. This situation reflected a broader trend in Australia, with a high demand for popular hot hatches like the Honda Civic Type R, Toyota GR Corolla, and Hyundai’s i20 and i30 N, coupled with supply challenges. The shortage was compounded by the discontinuation of certain models and an overwhelming demand for others, leading to a supply-demand imbalance.  

Toyota

Article volume trend:

  • Discontinuity

Among the 601 events Toyota encountered, a notable one happened on December 27, 2023. Daihatsu, a subsidiary of Toyota, suspended operations at its four factories in Japan, resulting in a short-term drop in stock price. This shutdown was a direct response to a scandal involving improper safety test practices that affected a wide range of models. The production stoppage was an extension of an earlier decision to halt vehicle shipments, initiated amid investigations into the flawed testing procedures impacting 64 different models.

  • Corporate Ban

Out of 250 reported incidents, a significant event took place on November 22, when the UK’s Advertising Standards Authority imposed a ban on advertisements for Toyota’s Hilux SUV, leading to a drop in stock price. The ban represented a major setback for Toyota; it was issued due to the ads promoting off-road driving without adequately considering the environmental impact. The authority criticized Toyota for advocating driving behaviours that demonstrated a lack of regard for nature and environmental sustainability.

  • Supplier Problems

Toyota faced 193 events related to supplier issues. A notable December 21, 2023 event involved a raid on Toyota’s subsidiary Daihatsu over a safety scandal, resulting in a lower stock price. This event led to suspension shipment suspensions, potentially affecting the supply chains of other major Japanese automakers like Mazda and Subaru. In a related development, Toyota recalled 1 million vehicles in the US due to defective airbag sensors supplied by Aisin Corp. These incidents marked a difficult period for Toyota, the world’s largest car manufacturer, highlighting the complexities and vulnerabilities in its supply chain.

Ford

Article volume trend:

  • Plants Shutdown

Ford experienced a total of 650 notable events. One major event occurred on October 12, 2023, when thousands of workers at the Kentucky Truck Plant, operated by Ford, initiated a strike, resulting in a subsequent price decrease. This action stemmed from unsuccessful negotiations with the United Automobile Workers (UAW) union. The strike brought a temporary halt to production at this facility, known for manufacturing some of Ford’s most profitable vehicles.

  • Discontinuity

Among 199 notable events, a significant one took place on September 26, 2023. Ford made the decision to suspend the construction of an electric vehicle battery plant in Michigan temporarily, resulting in the stock price staying low. This pause was due to various concerns, including competitive factors and ongoing negotiations with the UAW (United Automobile Workers). The decision faced criticism from the UAW, particularly over the usage of Chinese technology and apprehensions surrounding union demands.

  • Supplier Problems

Ford faced 103 events related to supplier problems. A critical event was reported on December 20, 2023, concerning airbag inflators supplied by ARC Automotive Inc, leading to a slight decrease in price. This issue escalated when the NHTSA (National Highway Traffic Safety Administration) advocated for a potential recall of up to 52 million airbag inflators. This recall consideration followed reports of certain inflators exploding during crashes, leading to injuries and fatalities. The situation underscores Ford’s involvement in complex supply chain challenges within the automotive industry.

Conclusion

Semantic Visions supply chain risk analysis of Volkswagen, Toyota, and Ford, the top global publicly traded automotive companies by revenue, reveals some of the key challenges faced by auto manufacturers. The data, drawn from global news and processed utilizing AI/ML technology, highlights the difficulties these companies face in maintaining operational efficiencies and addressing compliance concerns.  Overall, these events had a significant negative impact on share prices resulting in diminished shareholder value.  

Volkswagen dealt with IT disruptions and supplier issues, pointing to the need for better technological infrastructure and supply chain management. Toyota faced a corporate ban and safety scandals, underscoring the importance of ethical practices and stringent supplier oversight. Ford’s challenges included plant shutdowns and supplier-related problems, emphasizing the importance of strong labour relations and proactive supply chain risk management.  These events reflect broader industry trends and the necessity for adaptive management strategies. Understanding these challenges is vital for stakeholders, as they highlight the risks and the need for continuous adaptation to industry standards and regulations.

In summary, the experiences faced by Volkswagen, Toyota, and Ford in 2023 serve as a stark reminder of the ongoing complexities in managing large-scale automotive operations. These challenges illustrate that integrating effective operational strategies and risk management is essential for maintaining industry standards and ensuring resilient and efficient business operations in the automotive sector. 

Discover Semantic Visions solutions to see how your organisation can benefit from our expertise in comprehensive DaaS solutions and equip your business to navigate these demanding and ever-evolving industry landscapes.

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