Car factories in China closed due to novel coronavirus


The government of China has issued a guideline for automakers and car parts supplier to temporarily suspend operations due to the novel coronavirus outbreak, Reuters reports. As of yesterday (February 4), at least 24 provinces, municipalities and other regions in China have told businesses not to resume work before February 10.

Ford and its joint venture partner Chongqing Changan Automobile said it plans to resume production at the Chongqing and Hangzhou plants on February 10. Honda, which operates three car plants in Wuhan – the epicentre of the outbreak – with Dongfeng Group, will resume operations on February 13.

The PSA Group also has three plants in Wuhan, all of which will remain closed until February 14. Nissan’s plant in Hubei is also scheduled to restart on February 14. Toyota’s plants in the northern city of Tianjin and southern province of Guangdong will be shut until February 9, but revealed that it was assessing the parts supply situation. The downtime could be prolonged if the supply chain remains disrupted.

Hyundai’s production in South Korea is also affected due to disrupted parts supply, becoming the first major automaker to halt production outside of China. Most of the Korean automaker’s factories will be shut from February 7, with some production lines expected to restart on February 11 or 12, a union official said.

Tesla’s production of the Model 3 sedan in Shanghai could be delayed by up to 10 days due to the factory closure, and it’s currently evaluating whether the supply chain for cars built in its Fremont, California plant will be affected. The company said this could negatively impact profitability in the March quarter, but just slightly. Major car parts maker Valeo also revealed that its three sites in Wuhan will stay closed until February 13, at the very least.

Meanwhile, automotive research firm IHS Markit expects automakers to lose about 350,000 units of vehicle production in the first quarter of the year due to plant closures. Some industry analysts have speculated that some factories may remain closed until mid-March, which IHS said may affect production of more than 1.7 million units for Q1.

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