Posted On : 09 Mar, 2020
Due to the outbreak of corona virus, automakers factories in Wuhan and other cities in Hubei province will remain closed until Wednesday.
Even after they reopen on March 11, it is not clear whether they will have the raw materials to essential supplies to resume or carry out the normal operations. Automakers all over the world are concerned about the manufacturing operations regarding the automakers parts of the vehicles. It is especially relevant to China, as the Wuhan province, the epicenter of Corona Virus which is drastically affected by the outbreak and which is known as China’a “Detroits” accounts for the nearly 10% of the car industry and home to hundreds of parts suppliers.
Automakers are especially bothered about the health of the employees and unpredictable set of rules that are applicable in different provinces and regions which is making it difficult for the automotive industry which needs uniformity of rules for the smooth functioning of the automotive industry.
In some cities, if one worker gets affected, the whole factory needs to be shut down. Said one official at the Honda Motor company which has a manufacturing hub and more than 100 suppliers in Wuhan and surrounding areas.
The operations resumed at Honda are other Chinese manufacturing hub in the southern province of Guangzhou on Feb. 10 and the partial production resumed on Feb. 17. Honda is expecting to reopen its Wuhan hub this week after the authorities allow it. Together the two production units estimate for around 1.2 million vehicles a year and around 20% of the Honda’s total global production.
In Wuhan , due to partially blocked roads and health inspection on major transportation roadways, the automakers and finished parts suppliers are facing huge bottlenecks in carrying out the raw materials and also supplying the f finished products from the factories to the sea ports.
The corporate damage in the Hubei can be significant and long lasting. A federation of automotive products in Hubei province estimated that nearly 573 Hubei companies out of which 12 involved in the auto production estimated that around 97% of operations of the automotive hub have been halted and partially unfulfilled due to the outbreak of coronavirus. Around 60% of them feared that they would go bankrupt in three months period or less period of time if the operations are not resumed.
China’s automotive products manufacturers composed and exported nearly $53 billion of automotive products to the US, Europe, Japan, South Korea and elsewhere last year. If the situation does not improve in Wuhan province soon, the vehicle's production lines all across the world are feared to getting slowed or closed down. Therefore, we need to keep an eye over the outbreak of corona virus in Wuhan province of China and take adequate steps for the speedy improvement and control of the situation in China so that the losses can be minimized.