Ford, Toyota, Volkswagen in Fear of Production Slow Down

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Shortage in critical resin might slow down car production worldwide.

The automotive industry is facing a new crisis in the wake of a supply shortage of a special resin that has the potential to slowdown car manufacturing worldwide. The resin, known as PA-12, is used in the production of car brakes and fuel systems and is made by very few producers. Last month, during an explosion and the fire that followed at Evonik plant in Marl, Germany, a factory that produced this material was heavily damaged and is not expected to resume production for at least three months.

According to analysts that factory supplies 25% to 50% of the world's demand for this resin. There are three more companies who produce the material worldwide, none of them in the US. The reverberations of the fire were felt in Detroit. This week over 200 delegates from all major car manufacturers and automotive suppliers in the US attended an emergency meeting in order to consult on how to solve the shortage problem, following announcements by suppliers they reduced production capacity. DuPont, the American chemical giant has proposed a few materials as substitutes for the PA-12.

But because of the complicating and thorough vetting processes in the automotive industry this solution is more for the medium term than for the short term. The last time the industry suffered from shortages in components and parts supply was in the aftermath of last year's earthquake and tsunami in Japan.

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