The Economic Observer? Reporter: Zhou Ju? Zhou Ju? "I haven't gotten the news (of resumption of work) yet, and I'm still working at home." On March 12, three days after Dongfeng Honda received approval from the Wuhan Economic and Technological Development Zone for resumption of work, insiders at the company said it still had not received a firm notice to return to the factory and resume work. Similarly, the same day to obtain the resumption of work approval of the Dongfeng passenger car employees are still waiting for the company's notice, "today or work at home, the company may be some (resumption of work) procedures have not been done it, not too clear."
On March 10, documents showed that Dongfeng Honda and Dongfeng Passenger Vehicle had received a resumption of work approval from the Wuhan Economic and Technological Development Zone the day before, allowing the two companies and a total of about 200 suppliers to resume work in stages. The news was later confirmed by the company's internal confirmation. But for the time being, after more than a month's suspension due to the epidemic, the car companies have been getting approval for resumption of production, but have failed to start production immediately, and have entered an intense phase of preparation for resumption of work.
"We have been making preparations for the resumption of work, including the preparation of protective materials, employee health codes, and the coordination of the return of foreign employees to Han. We are resuming work in accordance with the government's unified arrangements." On March 12, the same home office of Shenlong Automobile insiders told the Economic Observer reporter. Sources indicate that the Wuhan plant of Shenlong Auto has also obtained approval for resumption of production, but the insider said further confirmation is needed.
But even if they can't go into production immediately, the Hubei enterprise stop-work order was lifted on March 11, plus car companies and parts and components companies have been approved to resume production, which means that the automotive industry's full-scale resumption of work and production has formally entered the countdown, which gives hope that the automotive industry chain will return to its normal state of operation.
The outbreak of the new Crown pneumonia epidemic during the Spring Festival led to a complete shutdown of Hubei's manufacturing industry, with many car companies and about 1,300 auto parts suppliers caught in a "standstill" state, affecting the national and even the global industry chain. During the period, the shutdown of automobile enterprises facing high losses of hundreds of millions of dollars per day, the product program is generally postponed for more than a month. At the same time, the parts and components enterprises located in Hubei Province, there is a loss of orders, and lead to Hubei outside the car companies face the risk of cut off supply and production.
The resumption of production in Hubei province is expected to revitalize the continuing downturn in the automotive market. According to the information, Hubei province's annual automobile production accounted for 9% of the national output. However, it is understood that at present, the Hubei region's automobile enterprises and parts and components enterprises are still facing low staff arrival rate, short-term upstream and downstream difficult to synergize, as well as logistics obstruction and other aspects of the problem. Based on this, there are views that the automotive industry in the true sense of the resumption of production or need to wait until April. But before that, some changes have begun to happen.
Comprehensive resumption of production will take time
Hubei is a major province of domestic automobiles and parts, but also the home base of Dongfeng Motor. With the advantages in the industrial chain, a number of car companies have production bases in Hubei. Among the vehicle companies, Dongfeng Honda, Dongfeng Renault, Dongfeng Passenger Vehicle, Dongfeng Infiniti, Shenlong Automobile, SAIC-GM, and Dongfeng Nissan all have factories in Hubei. Among them, the first four have all their production capacity in Hubei province, while Dragon has three plants with a cumulative capacity of 750,000 units in Wuhan, Dongfeng Nissan has a 180,000-unit-capacity plant in Xiangyang, and SAIC-GM has a production base in Wuhan as well.
Among these automakers, in addition to Dongfeng Honda and Dongfeng Passenger Vehicle, which have confirmed that they have received approval for resumption of production, the Wuhan plant of Shenlong Automobile, the north-south plant of SAIC-GM, and the Xiangyang plant of Dongfeng Nissan have news that their applications for resumption of production have been approved. However, in an interview with the Economic Observer reporter, Dragon Motor and SAIC-GM insiders said that further confirmation is needed. In an interview with the media, a source from Dongfeng Nissan said that the company's Xiangyang plant in Hubei Province plans to resume production on March 13 in an orderly manner and start assembly wiring. But he also emphasized that because the outbreak is changing every day, the arrangements for resumption of work and production may also be adjusted at any time.
Dongfeng Renault said the company would resume work on March 16, but said it needed further confirmation as to whether it had received approval for resumption. "We have already handed in the application, but the resumption of work will be coordinated by the government and DFL. Considering the demand for prevention and control, the resumption of work is currently localized and divided into batches, and we follow the government and DFG to arrange the resumption of work." Economic Observer reporter reporter learned from Dongfeng Renault by March 10th.
Overall, it seems that most of the vehicle companies in Hubei province have received approval for resumption of production, but it seems that it will take time to realize the real resumption of work and production. Up to now, even if it has been confirmed to receive the resumption of work approval of the car companies, their employees said they did not receive the exact notice of the resumption of work. Two days ago, Dongfeng Passenger Vehicle has revealed that it will resume work on March 12, but on the 12th, an insider said that it is still working at home, and did not receive notice of resumption of work.
Dongfeng Honda, which was first reported to have received the approval for resumption of work, also said on March 12 that its employees had not received notice of resumption of work. Previously, Dongfeng Honda sources said in an interview, the company in accordance with the government's requirements, only partial office, small batches of production preparations for the back of the resumption of work, but the specific production line of the resumption date has not yet been determined.
For the "time gap" between the approval of car companies to start work and the actual resumption of work, some industry insiders said there may be several reasons. First, before resumption of work need to do a variety of preparatory work, such as the purchase of epidemic prevention materials, the environment of the elimination and so on. Secondly, in the case of small parts inventory of vehicle enterprises, the need for upstream enterprises to move first, in order to realize the orderly resumption of work and production, so there may be a certain time lag.
In addition, the channel for employees to return to work is currently not smooth. Data show that although the current Hubei work stoppage order has been partially lifted, but Wuhan is still in the "closed city" state, so both local employees to the company, or foreign employees to return to work there are greater difficulties. "In the Hubei region of the car enterprises resume production rate is relatively low, some neighborhoods will even restrict the flow of personnel, 'labor shortage' certainly exists." Xu Haidong, assistant secretary-general of the China Association of Automobile Manufacturers, said in this regard.
Wuhan parts began to "out of the city"
Hubei and Wuhan parts enterprises to resume work, so that due to the shortage of supply of parts and components facing the shutdown of the OEMs breathed a sigh of relief. "Thousands of difficulties and obstacles, finally ushered in the resumption of work of key components." A senior executive of a commercial vehicle company lamented in his circle of friends.
According to Hubei Province's latest notice on March 11, enterprises in Wuhan that have a significant impact on the national and global industrial chain can resume work and production after approval in accordance with procedures. The industry believes that Hubei, as a gathering place for domestic and foreign auto parts suppliers, with the lifting of the work stoppage order, auto parts enterprises in the province will usher in a large area of recovery. Data show that Hubei gathered more than a thousand auto parts companies, including Bosch, Webasto, Delphi, Valeo, Honeywell, Visteon and many other large auto parts suppliers have factories in the province, but are stalled during the outbreak, making a number of car companies face production stoppages or have to temporarily replace the supplier.
At present, although the problem of production has been gradually resolved, but Hubei Province, parts and components to go out but still facing logistical problems. It is understood that due to the implementation of strict traffic control measures in Hubei Province, business logistics can not be restored in a short period of time, Hubei Province, parts and components shipped out of the province logistics blocked. In this situation, in order to ensure the normal production, automobile manufacturers are through a variety of ways to be "trapped" in Hubei parts transportation out.
For example, on March 7, 45 days after Wuhan was closed, a train loaded with 9,200 car seat frame skeleton and 9,520 seat back frame skeleton train from Wuhan station, running more than 2,100 kilometers, on March 9 to Jilin. This is in the Ministry of Transportation Logistics Protection Office issued under the No. 49 emergency transport task instructions, the State Railway Group to undertake emergency transport tasks.
This batch of materials is the first batch of auto parts that FAW Sedan Company Limited (hereinafter referred to as "FAW Sedan") needs urgently for resumption of work and production. FAW Car is a subsidiary of FAW Group, since February 18, its brand production lines have resumed production, but due to the lack of supply of parts and components, was forced to stop production to wait for pieces. Data show that FAW has more than 60 suppliers in Hubei ***, and in the FAW Group, due to supply chain problems forced to stop work to wait for pieces of more than FAW Sedan, as well as FAW liberation, FAW - Volkswagen and so on. In addition to this delivery of seats, etc., the other auto parts it needs to load the transportation plan is being developed.
"(Delivered by train from Wuhan) parts are indeed available, because this supplier is from Hubei, so both governments have given special coordination." FAW insiders told the Economic Observer. Because of his time has not yet come to Hubei enterprises resume work time, a Hubei parts and components enterprises in the middle layer of the Economic Observer said, the FAW shipped from Wuhan is the probability of the supplier's finished goods inventory, "under normal circumstances, the car company will have a part of the safety of the stockpile, usually about 2-3 weeks, this time to catch up with the Spring Festival may be a little more."
During the epidemic, because of the blocked supply chain logistics facing production stops and foreign "help" more than FAW Group. As early as February 7, Beijing Benz sent a letter to the Tianjin municipal government, requesting the latter to allow its suppliers to ship finished goods inventory to Beijing Benz. Beijing Mercedes-Benz said in the letter that the company has only one day of safety stock, and the daily loss of production stoppage reached 400 million yuan.
Industry insiders expect that if the impact of the epidemic on logistics continues, the demand for shipping parts out of Wuhan and Hubei may continue to increase as Hubei parts companies resume production one after another. This is not only because Wuhan parts enterprises gathered, at the same time Wuhan is a very large logistics transit warehouse in China, "some car companies even if there is no supplier production base in Wuhan, there may be transit warehouse in Wuhan, these stocks are affected by the epidemic can not be shipped out." An auto parts practitioner told the Economic Observer.
This article comes from the authors of the automobile home car family, does not represent the views of the automobile home position.