A prolonged Chinese lockdown to contain the aftereffects of the respiratory epidemic has disrupted the output plans of global automakers that largely rely on the planet’s biggest automotive market for both supplies and sales. Plants in China are on an extended New Year holiday to help contain the spread of the deadly coronavirus, and that has put the brakes on carmakers across the planet.
The majority of the automakers in China and their suppliers have manufacturing facilities spread all over the mainland and the severely affected provinces account for about 12-15% of total production, according to data from Jato Dynamics.
“Jato Dynamics’ forecasting partner LMC’s base case scenario expects the epidemic’s effects to continue into the second quarter of 2020, damaging consumer confidence, delaying purchasing, and impacting China’s consumer economy, which accounts for more than half of the country’s GDP,” read a note from Jato. “In this scenario, China’s GDP growth rate would drop towards 5% for 2020, with its personal vehicle market falling by 3-5%.”
While production will remain suspended in the affected provinces, other facilities are beginning to finalise a staggered output resumption schedule in the next week. Tesla resumed production at its Shanghai factory on Monday with assistance from local government officials, while Volkswagen opened a plant it operates with SAIC in Shanghai and most of the plants in its FAW joint venture, according to Seeking Alpha.
Daimler and Ford also restarted production at certain locations, the data suggested, while Toyota Motor and Honda Motor extended their production shutdowns.
General Motors announced that it will start production from February 15, while Toyota announced a resumption schedule beginning February 17, Jato said. Fiat Chrysler Automobiles was the first automaker to flag multi-week disruptions at European factories due to parts shortages. Shares of Tesla gained as much as 9% in early trading on Monday to reach $812 per share after the electric carmaker resumed production at its Shanghai factory.
