Coronavirus leads to extended shutdowns at Chinese auto makers and parts suppliers

Companies & MarketsNews
February 11, 2020

February 11, 2020

Several major automotive manufacturers and parts makers across China have suspended production due to the spread of coronavirus, among them Hyundai Motor, General Motors, Volkswagen, Renault and Toyota Motor. According to the South China Morning Post, closures are also disrupting the supply of auto components outside of China. 

Initially, factories in Hubei province were expected to remain shut until February 13. However, reports state that many factory closures have now been extended. According to CNBC, some provinces and districts have instructed companies not to return to work until March 1. 

Wuhan, the capital of Hubei and centre of the coronavirus epidemic, is one of China’s primary automotive industry hubs, home to both automotive and automotive component production. The province as a whole accounts for 9% of all Chinese auto production. Cui Dongshu, secretary general of China’s Passenger Car Association, recently stated that the manufacturing shutdown will lead to “severe parts-supply issues.”

Outside China, Hyundai has halted production in South Korea due to a wiring-part shortage said to be caused by a worker at a Chinese supplier falling ill with the virus. Nissan has halted production for two days in Japan, due to the lack of a part manufactured in China. In Europe, Fiat-Chrysler reports that one of its European plants may halt production within weeks due to supply chain issues regarding a critical Chinese component.

IHS Markit, a global provider of research, analysis and guidance on the technology, media and telecommunications industries, has reported that the outbreak may reduce vehicle output by more than 1.7 million cars due to plant closures. 

Companies & MarketsNews
February 11, 2020

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