Sunday, 9 February 2020

Automakers are feeling the pinch of plant closings.

The coronavirus continues to ripple through China’s huge network of auto and parts factories.
The longer the China supply chain remains paralyzed, the greater the chance that production in Asia, Europe and the United States could grind to a halt because of shortages of components. A lot is at stake in getting the factories humming again: The auto industry employs eight million people worldwide.
The German carmaker Daimler said Sunday that it was sticking with plans to begin reopening its Chinese factories on Monday. Its auto production in China is centered around Beijing.
Volkswagen will reopen only its Shanghai plant on Monday. Following the lead of BMW, PSA, Toyota and others, it said Saturday that production at most of its plants in China would not resume until Feb. 17 because of “challenges due to the nationwide restarting of supply chains as well as limited travel options for our production employees.”
Even a relatively brief interruption in the flow of parts and materials could have far-reaching effects.
The shutdowns at Chinese factories have hit automakers from several angles. The virus is already causing sales losses in China, by far the world’s largest car market. If they are forced to shut down factories outside of China because of parts shortages, as Hyundai has already done in South Korea, they could also lose sales in other regions.

No comments:

Post a comment