While most companies have yet to announce their January sales, the impact of the new Crown pneumonia on the car market is starting to make all the difference in terms of sales, according to the huge year-on-year declines of several car companies that have already done so. In addition to the impact on the automobile terminal retail industry, enterprises delayed resumption of work is the impact on all aspects of automobile manufacturing.
Originally should have been in January 31 on the resumption of work in the automotive industry by the impact of the epidemic control, one after another delayed to February 10 ~ 17, and even in some areas in view of the severity of the epidemic, the resumption of work of the enterprise was delayed to the end of February. This means that for most of February, the automotive manufacturing sector, including upstream and downstream industrial chain will face a shutdown.
In the upstream, the most serious outbreak of Hubei region as an important center of auto parts production and transportation, a large number of industry chain supporting suppliers are rooted here, gathered a large number of Bosch, Delphi, Virginia, Visteon, Valeo and other international mainstream parts and components enterprise production base, especially some of the chassis of the spare parts is the exclusive supply of Hubei region.
With more than 60 sunroof patents, Webasto has a market share of more than 65% in the field of automotive sunroofs, and its largest production base in the world is also located in Wuhan. Valeo and Faurecia, which supply parts to Dongfeng Shenlong, Dongfeng Nissan and Zhengzhou Nissan, also have their main business units in Wuhan, with more than 3,000 employees at the two plants, and have yet to resume work due to the epidemic.
Besides the Hubei region, auto parts manufacturing industries across the country have been affected to varying degrees by lagging production capacity because of delayed start-up problems, and the bad situation is starting to pass out from all over the country.
A week ago, Huzhou, an auto parts enterprise Huidahuzhou to the local Trade Promotion Council issued a request for assistance to open force majeure factual proof. The enterprise said it needed to deliver 10,000 sets of products per week to its customers in the near future, and that the ongoing work stoppage, if not properly resolved, might lead to contract losses of 2.4 million yuan, and even recovery of about 30 million yuan in losses from its customers, which would also have an incalculable impact on the enterprise's goodwill.
On Feb. 6, Beijing Benz, a leading domestic luxury carmaker, sent a letter to the Tianjin government requesting special approval for its 19 parts suppliers in Wuqing, Tianjin, to resume work ahead of schedule. The letter said that Beijing Benz has entered a critical moment in the countdown to the shutdown, and if the supply of parts and components can't keep up on Feb. 10, its single-day loss will be as high as 400 million yuan.
A survey conducted by the China Association of Automobile Manufacturers on 212 parts and components enterprises showed that the impact of the epidemic, parts and components enterprises with the highest loss of business income reached 2 billion yuan, not just money, the epidemic on the entire industrial chain caused by the immeasurable impact of delayed start-ups, isolation of personnel, logistics stagnation, so that the automotive supply chain to generate the problem is spreading globally.
IHS expects production losses from China's domestic auto factories to become so great that production will be cut by more than 1.7 million vehicles in the first quarter if they are idled until March, due to the impact of the supply chain of spare parts.
The continuing spread of the epidemic in China has also sparked concern among overseas automakers. The Chinese market is the center of global auto parts sourcing, with more than 80 percent of the world's auto parts related to Chinese manufacturing. Data from the General Administration of Customs shows that auto parts companies in China exported more than 60 billion U.S. dollars in 2019, and the multinational parts continue to increase investment in Chinese factories, but also let the supply chain appeared in the current situation of the whole body.
South Korea's Hyundai became the first overseas manufacturer to announce a factory shutdown due to the outbreak, due to a shortage of wiring harness parts from Chinese suppliers. South Korea imported $1.56 billion worth of auto parts from China in 2019, data show. A Kia Motors executive previously said all three of the company's auto plants in South Korea would be shut down due to a shortage of auto parts.
More and more overseas automakers are joining the "shutdown club" because of the supply of parts from China. Renault said its South Korean subsidiary, Renault Samsung Motors, will suspend production at its Busan plant for four days from February 11th. Nissan said this week it would stop two production lines at its Kyushu plant from Feb. 14, a shutdown that could affect about 3,000 vehicles, and FCA warned that disruptions in parts supply could threaten production at one of its European plants for two to four weeks.
In response to the impact of possible supply disruptions, a number of global automakers are re-evaluating their ability to supply parts to China, and some automakers in South Korea, Japan, India and other countries are making decisions such as temporarily shutting down production and looking for alternative suppliers to cope with the supply chain impact of the China outbreak.
As the world's largest auto consumer market, the strong consumption and production capacity has given rise to a huge auto parts supply chain system, and has made China's manufacturing industry an indispensable and important link in the global automotive industry chain, with China's parts supply system playing an increasingly important role in the development and promotion of the global automotive industry.
Epidemic relentless, the new crown pneumonia test of human immunity, but also test the entire parts supply system in China's ability to resist risk, especially for small and medium-sized parts enterprises, by the upstream raw materials and labor costs, as well as the price level of the host plant downward pressure, coupled with the business shutdown brought about by the mismatch between the inventory, costs and outputs, and even face the risk of replacement, which pushed them even more to the the edge of life and death.
Wen/Gan Fangli
This article comes from the authors of the automotive home car family number, does not represent the views of the automotive home position.