As the rest of the world grinds to a halt, China is slowly rebooting operations following an extended shutdown which began during the Chinese Lunar New Year in late January. According to Automotive News, several car factories have revived its production lines, and flights have been resumed.
These signs of recovery in the world’s second-largest economy provide some relief for global manufacturers, many of which will remain affected in the coming months as the Covid-19 viral upheaval continues to cripple Europe, India, Latin America, and the United States.
Certain areas within the Hubei province are seeing employees return to work, and the lockdown on ground zero, Wuhan, will be lifted on April 8, 2020. This is a sliver of good news for the automotive market – car sales in China hit rock bottom last month, but a slow rebound is expected as the spread of the virus slows and customers return to shopping, an auto industry group said.
Analysts at Sanford C. Bernstein said “real-time indicators show that China is restarting its industrial complex. Clearly the restart is at an early stage, but things are gradually improving.” The subway traffic in China has risen over 21% last week, and online sales of large appliances grew in volumes and average prices on a week-to-week basis,.
For car brands, BMW, Daimler, Fiat Chrysler, Ford, Honda, PSA Group, Nissan, Tesla, Toyota, Volkswagen, and Volvo have all restarted their operations, albeit under the approval of their respective regional authorities. For FCA, more than 90% of its dealers and 95% of staff at the Guangzhou Automobile Group are back online, and it said “the overall manufacturing and commercial operations are gradually resuming business.”
Both of Ford’s joint venture companies in China have achieved almost 100% recovery, and two of Honda’s JV firms in China have not experienced shortage of parts. The PSA Group’s joint venture with Dongfeng Motor, which is based in Wuhan, has already restarted production. It also has two other manufacturing facilities in Chengdu and Xiangyang.
Meanwhile, all Nissan factories in China are up and running, while Tesla’s Gigafactory had already surpassed its production capacity by making 3,000 cars a week. Toyota’s plans in Guangzhou and Changchun have reinstated the regular two-shift schedule, but some of its production lines remain operational on a single shift basis as a precautionary measure. Nearly all of Toyota’s dealerships are open, and surprisingly it has no plans to adjust its 2020 China sales target.
Volkswagen, too, is almost back up to normal. It faces challenges due to a slow national supply chain and logistics ramp-up, as well as limited travel options for some of its employees. But according to VW Group, its partners’ component production sites are now online, and the company will continuously adjust output levels based on current conditions. It still runs on a single shift basis, for now.
Lastly, Volvo. The Geely-owned Swedish automaker reopened four of its manufacturing facilities in China earlier this month, but it said current showroom traffic indicates that the car market has returned to normal. Volvo has plants in Chengdu, Luqiao, and Daqing, while its plant in Zhangjiakou builds engines.