Guangzhou auto companies hit by production halt as Shanghai shockwaves spread

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Photo taken on Oct. 16, 2018 shows the automobile production line of Guangzhou Automobile Group Co., Ltd in Guangzhou, south China’s Guangdong Province. Photo: Xinhua

Automotive supply chain issues in Shanghai and its surrounding region are now sending shock waves that are spreading to vehicle production bases in other parts of the country, with major auto companies in Guangzhou seeing production suspended and shipments drop dramatically due to a shortage of auto parts and stalled. logistics.

The ripple effect has already led to a drop in shipments of around 30% for major auto companies in Guangzhou, such as Guangzhou Automobile Group Co (GAC Group) and its units GAC Honda and GAC Toyota, an insider said on Saturday. industry to the Global Times.

GAC Honda, GAC Toyota and Dongfeng Nissan have stopped or suspended production. Some industry players in the city also told the Global Times that the strict epidemic restriction measures in Shanghai and the nearby Yangzte River Delta, where their main suppliers are located, have posed serious challenges for their production and distribution. working.

Cui Dongshu, general secretary of the China Passenger Car Association, also told the Global Times on Saturday that anti-pandemic restrictions had badly affected auto shipments for Guangzhou auto companies.

Cui estimated shipments fell by about 20 to 30 percent in the city, which is one of China’s major manufacturing bases and export hubs.

Guangzhou is currently the city with the largest vehicle production capacity in China, and the suspension of production by some companies could further impact the domestic auto industry, observers said.

In 2021, annual automobile production in Guangzhou reached nearly 3 million units, ranking first in the country for the third consecutive year. And retail sales of new energy vehicles grew 1.3x year-over-year, reaching double the amount sold in 2019.

Cui said that although companies in Shanghai are gradually resuming production, the speed of recovery has been “much slower than expected” and it will take longer for things to return to normal. “Only when the Shanghai virus is brought under control can we expect a full recovery of the entire industrial chain.”

Across the country, auto sales have weakened in recent weeks. Retail passenger vehicle sales for April are expected to be 1.1 million units, down 31.9 percent year on year, the China Passenger Car Association (CPCA) said on Friday.

The association said resident incomes and consumer confidence in coronavirus-hit areas have been hit, further limiting the auto market recovery.

In the new energy market, some major manufacturers were also affected by production and supply problems, and their sales fell in the short term, but most manufacturers in the sector maintained good commercial performance. The new energy market is expected to maintain a market penetration rate of more than 25 percent this month, the CPCA said.
Repeated outbreaks of the epidemic will have some impact on various OEMs. If the situation continues, it will have a big impact on the entire industry in the long term, China’s largest electric vehicle maker, BYD, told the Global Times on Saturday.

The Shenzhen-based company said a shortage of auto parts had caused many businesses to suspend production, but it said BYD’s strategic planning had given the company “better risk-response capability”. .

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