Auto forecasts unchanged despite COVID on production resumptions

COVID-19 is hurting vehicle production in China, with several carmakers and supplier plants standing idle in hard-hit cities, but the country's major industry association has not revised its sales forecast for the year.

Carmakers produced 2.24 million vehicles in China in March, down 9.1 percent year-on-year, said the China Association of Automobile Manufacturers on Monday. Vehicle sales stood at 2.23 million in the same month, down 11.7 percent year-on-year.

The association did not revise car sales estimates for 2022, which it said earlier this year could reach 27.5 million, up 5.4 percent from 2021.

Recent COVID outbreaks in Shanghai and Jilin province have been affecting vehicle production in the country since March.

However, as the number of COVID cases is falling in Jilin, local authorities said on Monday that they are trying their best to help FAW Group and its joint ventures resume production as soon as possible.

Shanghai and Changchun, capital of Jilin province, are home to major automakers, including Volkswagen and Tesla, as well as their suppliers.

Each city accounts for roughly 11 percent of vehicle production capacity in the country, but suppliers in the two cities offer components to carmakers elsewhere as well, according to the China Passenger Car Association.

Electric car startup Nio stopped production on Saturday at its plant in Hefei, Anhui province, saying that its suppliers had failed to ensure supplies because of COVID outbreaks.

Insufficient supplies cut March production at Great Wall Motors by 14.85 percent year-on-year, said the carmaker, whose sales fell 22.99 percent in the same month.

"A lot of uncertainties remain, so production and sales are facing a lot of pressure," said Cui Dongshu, secretary-general of the CPCA.

Tesla's Shanghai factory, which produces cars for both China and overseas markets, has been put on hold since March 28. The plant typically produces 6,000 Model 3 and 10,000 Model Y vehicles per week.

German carmaker Volkswagen said its joint venture with SAIC Motor has halted production in Shanghai since April 1. SAIC Volkswagen produced over 3,300 vehicles a day in the same month last year.

Its production base in Shanghai produces both gasoline cars including the popular Lavida and electric vehicles including the ID series.

"It first started with auto suppliers and we had to stop production as well," said an SAIC Volkswagen representative.

Key auto suppliers including Aptiv and Thyssenkrupp closed their plants in Shanghai starting from March 29, according to Reuters.

Yet GM's JV in Shanghai has managed to maintain production as it provides for its workers to live and work in isolation to prevent transmission of the virus.

Also, planned production resumption in Changchun, Jilin province, is expected to help ease disruptions caused to the country's vehicle production by the contagion.

FAW Group, including its JVs with Volkswagen and Toyota, is capable of producing over 10,000 vehicles a day, based on calculations of its sales during the same month last year.

FAW-Volkswagen, which produces and sells Volkswagen and Audi cars, saw its production slashed by 60 percent in March because of COVID.

The JV said its plants in Changchun account for 40 percent of its total production capacity in the country. Its sales in the same month saw a 40 percent drop as well, to 126,000 units, but it still performed tops nationwide.