Guangzhou Car Industry Experiences Production Slowdown Due To COVID-19

At a time when Shanghai, one particular of China’s big manufacturing hubs, is in the midst of a COVID lockdown on vehicle manufacturing, the vehicle market in Guangzhou is also dealing with production slowdown.

Given that mid-March, the unfold of COVID-19 and the tightening of COVID-19 restrictions in Hong Kong and several towns in mainland China have experienced a great destructive impact on the vehicle industry’s source chain in Guangzhou. According to the GAC spokesperson, the sharp boost in COVID-19 instances in Shanghai, Jiangsu, Zhejiang, and Guangdong induced many areas suppliers to suspend production. Also, the sharp maximize in COVID-19 instances in Hong Kong has incurred 7 million RMB (1 million USD) in month-to-month cross-border transportation prices for automobile corporations in Guangzhou.

Considerable OEMs in Guangzhou, which include GAC Honda, GAC Toyota, and Dongfeng Nissan, all have suspended production or semi-suspended manufacturing, according to China Information Community at an on line media briefing held by the Guangzhou Municipal Industry and Info Technological know-how Bureau on April 21. The combined yearly production capacity of these businesses is about 2 million autos.

Dongfeng Nissan has confirmed that it has stopped generation due to an insufficient supply of sections. Setting up on April 13, some of Dongfeng Nissan’s Guangzhou Huadu Plant generation traces began to prevent manufacturing. Then the 1st, 2nd, and 3rd lines all stopped output from April 14 to 19. Production was later on resumed on the 20th of this month. Relating to the non permanent suspension of production, a Dongfeng Nissan spokesperson spelled out that “Because of the pandemic in Shanghai, the provide chain logistics simply cannot be organized normally, which has a relatively significant impression on Dongfeng Nissan’s manufacturing plan.”

Dongfeng Nissan has quite a few factories throughout China, including Guangzhou Huadu Factory, Xiangyang Manufacturing unit, Zhengzhou Manufacturing facility, and Dalian Factory, with an annual manufacturing capacity of 1.36 million cars. The Guangzhou Huadu Plant is the major creation foundation of Dongfeng Nissan, with a annually generation capability of 600,000 cars and trucks.

In 2022, GAC programs to raise generation and income by 15% (about 2.46 million cars) from 2021. This calendar year, GAC created and sold 598,000 and 608,000 cars in the first quarter, a calendar year-on-calendar year increase of 25.% and 22.5%, respectively.

The shockwaves of the vehicle source chain crisis in the course of Shanghai’s lockdown before this calendar year distribute to Guangzhou, with key OEMs in Guangzhou going through creation suspension and semi-suspension thanks to automobile parts shortages and blocked logistics. Cargo declined by 30& for these substantial OEMs, together with GAC and its GAC Honda and GAC Toyota subsidiaries. 

To enable stabilize output and procedure, the Guangzhou Municipal Business and Information Technological know-how Bureau requested organizations reduced in the supply chain to coordinate and work alongside one another to restore car creation in Guangzhou. For example, 46 GAC Honda suppliers resumed functions on March 20, lowering the decline of output worth from 7.7 billion to 3.8 billion RMB (1.17 billion to 579 million USD). Moreover, GAC said that it would continue to advertise the alternative of elements and elements to enable stabilize creation. It ideas to cut down risks by means of immediate mildew opening, product substitution, production transfer, and the introduction of new suppliers to cooperate with creation.

Currently, Guangzhou has the greatest car creation capacity in China. This manufacturing suspension will have a important impact on the Chinese vehicle field. In 2021, the yearly auto generation in Guangzhou was nearly 3 million units, position initial in China for three consecutive many years. What’s more, the retail income of electric powered motor vehicles in Guangzhou in 2021 elevated by 130% considering the fact that 2020 and 200% considering that 2019, in accordance to the financial data produced by the Guangzhou Municipal Data Bureau.

Source: Sohu, AutoHome, IFeng