On Wednesday September 14th, I attended Tim Ingle’s talk at Davidson College. As Toyota North America’s CFO, it was very interesting to hear his opinions and perspectives on supply chain issues, inflation, and geopolitical tensions that are directly affecting Toyota and the automobile industry. He emphasized that all these three topics are actually connected. The materials that are used to make cars come from all across the world including countries that are friendly with the US and countries that are less-friendly with the US, specifically China and Russia. Recent geopolitical tension regarding the Russian invasion of Ukraine and the Taiwan strait has serious consequences for Toyota. For example, many raw materials are mined in Russia because of its rich deposits, however the sanctions have led to much higher input prices for Toyota’s cars. Moreover, Mr. Ingle mentioned that while some minerals such as lithium are mined in countries like Australia, they are refined in China. Hence, Toyota ultimately has to purchase the lithium from Chinese companies. With severing relations between China and the US, Toyota is expecting for higher tariffs. With inflation at its highest point in many years, these supply chain issues and protectionist policies are making prices of cars higher.
Another really interesting topic that Mr. Ingle touched upon was electrical vehicles versus hybrid vehicles. With the target of reaching net zero, many automobile companies have focused on developing EVs. However, Toyota has been focusing on developing hybrid vehicles that run with electricity and when the power runs out, it switches to burning petrol. According to Mr. Ingle, this business model has been very effective and many more people are purchasing hybrid cars because it is sustainable and the car can travel for long distances if needed unlike EVs.
It was really interesting to hear about these macroeconomic topics in a specific industry, and how Toyota is doing its best to accommodate these supply chain shocks. In economics classes, we learn theories and graphs but not many applicable examples. This talk gave me the chance to think about those theories and how they work in reality. In terms of sustainability and reaching net zero, I think it is doable but still rather challenging. As long as car companies are still using raw materials that are mined from the earth to make cars, it will be very difficult to reduce the environmental impact of mining activities that contribute hugely to climate change.
It was very interesting reading your post as you are definitely more knowledgeable on economics and the automobile industry than me. It really helped clarify some of the things I heard but did not understand during Mr. Ingle’s talk. I definitely think it was interesting to learn about all the factors that can affect a company as I never really gave much thought to how policies and international conflicts affect them. I really liked the discussion about hybrids as they seem a very convenient alternative to gas cars/
I attended Tim Ingle’s discussion, and I also enjoyed how the economics I have been learning can be applied on the macroeconomic scale. I found his discussion on the increased price of cars quite informative and applicable, but it raised some concerns for me. Although the increased price of cars can impair the daily lives of people, I wonder how Latin American countries are dealing with the overall increase in prices. The current circumstances are imposing hardship on these nations, and I think this is vastly overlooked by the rest of the wealthy world, which is more focused on the prices of their luxury commodities. All in all, I think the talk was worth attending, but I wish it was directed towards a more global scale.
Based on your post, it seems like you enjoyed attending Tim Ingle’s talk. You explained in this post very well how the speaker connected supply chain issues with how it is impacting Toyota’s automobile industry. I find it important that you mentioned how Mr. Ingle spoke about electric cars compared to hybrid vehicles. I believe finding new sustainable ways to make transportation more Earth-friendly is important. There is a large quantity of pollution in the air that not only negatively impacts our health, but every living thing as well.
Jeremy,
From your post, I can sense you may have a passion for economics and I think it is critical to know the basics of economics, in order to be prepared for adulthood situations. From the information you provided to me from Tim Ingles talk I can infer that sustainability cost more, however, everybody can not afford those specific prices. I am looking a this issue from the perspective that the United States is a very developed area, while in Latin America they are very undeveloped and yet face similar issues to the one at hand. So with how cost effective this sustainability conflict is, do you think Latin America is at an even more disadvantage due to instability?
Hi Jeremy. Sounds like a really interesting talk on something you have a lot of experience in. I am wondering what you think the implications of the supply chain issue in the automobile industry would be on Mexico, and Mexico-US relations following the high inflation rates of 8.7%? Especially since around 28% of exports of Mexico come from Automobile?
I too attended Tim Ingle’s talk and found it to be a fascinating account of the automobile industry. His talking points regarding the global supply chain drew me back to my International Relations class I took last year in which we discussed globalization. In todays climate with the Russian-Ukraine war, and growing tension with China, I beg to think that countries are likely to move away from a globalized way of economics and move to a more nationalistic approach. This I feel will have great effects on industries like Toyota who so heavily rely on rival nations for business, and will cause a headache for CFO’s like Tim Ingle.