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China Carmakers Weigh Long Stoppages Over Covid Curbs

Sales in the world’s biggest auto market plunged in March as Covid curbs took their toll and Tesla was among the automakers feeling the pain of limits on production


China says carmakers must have licences for mapping data collected by 'smart cars'
Tesla's China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai. File photo: Reuters.

 

Carmakers in China may have to suspend production in May if suppliers in Shanghai and surrounding areas are not able to resume work, He Xiaopeng, the chief executive officer of Chinese electric-car maker Xpeng, said on Thursday.

Growing lockdowns to stop the spread of Covid-19 in China are clogging highways and ports and shutting countless factories – disruptions that are rippling through global supply chains for goods ranging from electric vehicles to iPhones.

Some Chinese authorities are trying to resolve the situation, said He on his personal WeChat feed, adding he hoped more government departments can provide support.

His comments were echoed by Huawei’s Consumer Business Group chief Richard Yu, who also warned of huge economic costs if factories in Shanghai couldn’t resume production.

Yu said all technology and industry firms would have to stop production in May if their suppliers are in Shanghai, the official Securities Times reported on Friday.

Sales in the world’s biggest auto market plunged in March as Covid curbs took their toll and Tesla was among the automakers feeling the pain of limits on production.

The US automaker has suspended production at its Shanghai plant since March 28, leading to an output loss of more than 40,000 units, according to Reuters calculations.

The manufacturing hub in Shanghai makes 10,000 Model Ys and 6,000 Model 3s per week, said a person familiar with the matter.

Nio also suspended production at its Hefei factory – even though there were no local-level curbs – because suppliers from other areas had stopped work.

Carmakers with production facilities in China’s northeastern provinces are resuming production as those places emerge from lockdowns.

State-owned Chinese automaker FAW Group has resumed some production at its Hongqi plant in Jilin while BMW said all of its plants in the city of Shenyang restarted operations on Thursday.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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