Chinese dependence: the impact of coronavirus on automakers

FineAuto
Chinese dependence: the impact of coronavirus on automakers

The number of cases of infection with coronavirus in China (at the time of writing the news about 24 300) has led to the fact that the government forcibly suspended operations in several provinces. Such actions were undertaken at the end of January. Including stopped working and companies-vehicle manufacturers and component suppliers.

Official production holidays related to the celebration of New year in China, which this year fell on 25 January, was extended until 9 February (according to tradition, New year by the lunar calendar). Among the provinces in which work was suspended, were Guangdong (eng. Guangdong) and Hubei (eng. Hubei). And if the first focus 12.8% production capacity of China made cars, the second provides 9% of China’s automobile production and more than 3.5% of demand. Also, the coronavirus has hit the supply of components, because in Hubei province such companies – a few hundred.

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By order of the Chinese government, the company Тeslа stopped production of Model 3 at its plant in Shanghai. However, the big loss from this forced action of the company does not expect, because the share of the Chinese Model 3 in the overall quantity produced by electric cars is still small.

Toyota production in China also stopped now (at least until 9 February). Commenting on the situation, the representative of the brand said that the decision was made based on recommendations from local and regional authorities. Account has also been taken the situation with suppliers. In addition, employees of the company, following the recommendations of the Japanese government, has restricted the visit of Hubei province (administrative center of which is Wuhan, the epicenter of the disease).

Also, on a temporary basis are now closed Chinese factories such as Ford and Nissan. Volkswagen, Daimler and Continental plan to resume production in the next week, if I can get permission from the Chinese government.

The consequences of the spread of the disease is not concentrated solely in China. For example, Hyundai Motor company was forced to suspend the Assembly of the crossover Palisade in South Korea due to problems with the supply of components. Maybe other factories will also be forced to put production on pause. An example of the Korean manufacturer shows how the world economy depends on China.

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