A Number Of Car Companies Delayed To Return To Work: Affecting Or Affecting The Global Market

In February 3, 2020, Wuhan sealed the city for tenth days.

In the ten days, from Wuhan to Hubei to most parts of the country, the sudden outbreak of a new coronavirus infection swept the Chinese auto industry in the cold winter.

Hubei is at the center of the storm. It is China's auto industry. When the new crown is over, there are delays in many cities.

As one of the four largest automobile production bases in China, Hubei plays an extremely important role in China's automobile industry.

From the perspective of industrial layout, only Dongfeng Road located in Wuhan has gathered nearly 2 enterprises, and the total revenue has reached trillions. It includes 7 vehicle companies, 12 automobile assembly plants, more than 500 parts enterprises, 54 "world top 500", produces 37 kinds of vehicle models, and has 14 R & D institutions at the provincial level or above.

And looking at the entire automobile industry in Hubei Province, as of the end of 2018, Hubei automobile manufacturing enterprises above Designated Size 1482; in 2019, Hubei province produced 2 million 240 thousand cars, accounting for 8.8% of the country. Second only to Guangdong, Jilin and Shanghai, it has always ranked fourth.

As a whole, Wuhan is the center of gravity in Honda, Renault and PSA. This epidemic affects the development of China's automobile industry and even the global automotive industry.

With the spread of Wuhan's closure of the city and epidemic to the whole country, many car companies have also been helping to meet the uncertain challenges of China's continuously depressed automobile market and sudden outbreaks while donating cash and supplies, providing emergency vehicles and producing negative pressure ambulances to Wuhan.

A number of car companies temporarily "stop"

In January 25th, Peugeot Citroen plans to evacuate its employees and family members from Wuhan, isolate them in Changsha and take them back to France after observation. Subsequently, many car companies such as Renault and Honda have followed suit.

In addition to the Changan car, which officially announced the resumption in February 3rd, a number of car manufacturers in Hubei have repeatedly delayed their return to work, including TOYOTA, Honda, Tesla, Changan Ford, Dongfeng Motor and so on.

"The specific starting time will depend on the situation of epidemic prevention and control." In February 3rd, Dongfeng Automobile Group responsible person told the twenty-first Century business reporter.

In a February 1st announcement, Shenlong company said that the official resumption time would not be earlier than 24 in February 13th. The specific time will be announced according to the change of epidemic situation and relevant government requirements.

In addition, PSA, general motors, Honda and other car companies that have factories in Wuhan also issued regulations limiting employees' temporary travel to Wuhan.

The direct impact of factory shutdown is the shortage of spare parts and the hindered production capacity. In January, vehicle sales will be directly affected. If the epidemic continues, the production and sales volume in February will also be worrisome.

"In the background of the difficult market of China's passenger car market in 2019, the impact of this epidemic on the car market is worse and worse, resulting in a slight impact on the car market that has just recovered." Cui Dongshu, Secretary General of the Federation, said: "the core feature of automobile production is the long industrial chain, and the link between supply chains is extremely important. Hubei's auto parts system should not resume production on time, at least for a week or even longer. "

A few days ago, the ideal car announced that affected by the national and local epidemic prevention and control, the users who had expected the delivery time in February and March would strive to delay the delivery time within one month.

The ideal vehicle said in the announcement that the reason for the delay was that the production of various parts suppliers in the automotive industry was affected to varying degrees (of which more than 10% of the components were produced by enterprises in the Hubei area, the most affected by the epidemic).

Tesla, which formally delivered Model 3 in early January 2020, is also deeply affected. It is expected that the increase in Model 3 will be delayed for 1-1.5 weeks. Tesla's chief financial officer, Zach Kirkhorn, expects the delayed return of the factory will have a "slight effect" on the profitability of Tesla in the first quarter of 2020.

Affecting or affecting the global automotive market

According to IHS Markit, the world's leading information analysis and solution provider, with the outbreak of the new coronavirus pneumonia, the factory's shutting down at the latest may last until mid March, which will lead to a reduction of over 1 million 700 thousand vehicles in China, down 32% from a year ago.

In addition, Joseph Massaro, chief financial officer of Anne fo, said in a recent conference call that China's auto output will fall by 3% in 2020. In the first quarter of this year, China's auto production will drop by 15%, which also involves the closure of factories due to the extension of New Year holidays.

However, for the car companies in Hubei Province, it is urgent to adjust their production plans. If the late production increases, the loss of vehicle output in the first quarter will be compensated.

Cui Dongshu also recently adjusted the expectations of the Chinese car market in 2020. He thinks that the 1% increase forecast for the whole year now seems to be under some pressure.

"After the outbreak, it will certainly aggravate or worsen this year's auto market situation. According to the current development trend of the epidemic, the impact of the overall economy, including car buying groups, may lead to a significant decline in the volume of auto market sales in the first quarter. " In January 2nd, Wu Songquan, senior chief expert of China Automotive Technology Research Center, also told reporters that the impact of the epidemic is still temporary. After the end of the epidemic, economic activities will return to the right track.

According to IHS, 11 of China's 32 provinces, municipalities and autonomous regions have extended the Spring Festival holidays, including Shanghai, Guangdong, Chongqing and Zhejiang. These provinces bear more than 2/3 of the total vehicle output, and the impact of the epidemic on the automobile industry is self-evident.

"The impact of Hubei is the biggest, of course, the impact of other provinces and municipalities is also the same. As an important part of the global automotive supply chain, the outbreak of the disease will result in a shutdown, limited production and logistics disruption, which will affect the world's auto industry and the automotive market. "

Wu Songquan said, "from the global perspective, the auto market has been stagnant, most of the auto market is declining. If China stops too long, it will probably affect global automobile production."

Local time on January 30th, Tata Motors said that the outbreak or caused the Jaguar Land Rover profits to be hit. In order to prevent the spread of the epidemic, the Chinese government carried out traffic control and extended the Spring Festival holiday. Jaguar Land Rover's automobile production in China or affected, and the outbreak of the epidemic or Jaguar Land Rover's 2020 fiscal year's profit expected to drop nearly 3%.

"Under the current circumstances, automobile companies and distributors, suppliers, including partners should be united." Facing the shutdown of China's auto industry under the epidemic situation, Wu Songquan finally said that how to maintain the stability of the dealer system, including the stability of suppliers and overcome the current difficult situation, is a problem that all automobile manufacturers must consider.