Low-cost manufacturing seen to shift from China to Africa

Article by Anita Panait, on August 12, 2013

Africa will replace China as global center of low-cost manufacturing, no thanks to a changing demographic in the Asian country, according to Sheryl Connelly, global consumer trends and futuring manager for  Ford Motor Co.  Connely remarked at the 2013 CAR Management Briefing Seminars that changing demographics will force carmakers and suppliers to reconsider their future product and production plans.

She said China’s decades-long one-child policy will mean that the country will have its peak worker population in 2014, after which the number of active workers will slowly decline while the number of retirees and other dependents surge.

Connely quip that due to this, China will have a hard time keeping its place as a low-cost manufacturer, a designation that “will move to Africa." As Ford’s official futurist, Connelly is tasked with forecasting potential scenarios to enable the carmaker to prepare for both expected and unexpected events.

Some forecasts and plans seem to be impossible to occur, like when extra-terrestrial life forms land on Earth and how humans would deal with it. Connely remarked that some forecasts are useful.

One of those is the possibility that Japan, which is located on the so-called “Ring of Fire,” might succumb to another cataclysmic earthquake and tsunami, which most recently occurred in March 2011. According to Connelly, while people in Japan were aware of and prepared for those eventualities, global carmakers seemed to be taken surprise when the earthquake and tsunami forced them to shut down a number of key supply facilities. Connely said that Ford uses forecasting scenarios to create corporate strategies.

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Topics: china, africa



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