MIIT supports priority in work resumption of Hubei auto parts suppliers

Shanghai (Gasgoo)- Given that the epidemic in Hubei province has been effectively contained, the resumption of local businesses' operation and production should be addressed now.

Among a multitude of industries, the work of the auto parts is expected to be restarted on a priority basis, according to Xin Guobin, Vice Minister of China's Ministry of Industry and Information Technology (MIIT). The plan has also been vigorously supported by Hubei provincial government and local joint epidemic prevention & control mechanism.

(Dongfeng Truck, photo source: Dongfeng Motor's WeChat account)

Work resumption is taking place across Hubei's auto parts companies in an orderly manner, Xin said at a press conference held on March 13. For instance, some component suppliers in Xiangfan have restarted production. Besides, Dongfeng Motor Corporation, the hardest-hit auto group with most vehicle plants and parts suppliers located in Hubei, has witnessed its Shiyan truck manufacturing base go into resumption with its daily capacity topping 200 units. The joint venture Dongfeng Honda and the group's self-owned PV unit have both resumed production to-day.

Mr. Xin pointed out that automobile industrial chain is virtually an interwoven global business with far-reaching influence. Both Chinese and foreign OEMs import auto parts from each other's local markets. Since building a car involves tens of thousands of auto parts, an OEM is usually equipped with hundreds of tier 1 suppliers and thousands of tier 2 & 3 providers.

As one of four major auto production bases in China, Hubei gathers numerous OEMs and auto parts suppliers. Obviously, the coronavirus epidemic originated from its capital Huhan has engendered a huge impact on the auto industry nationwide. According to Xin, such global automakers as Volkswagen, BMW and Hyundai all expressed their concerns over the suspension of operation and production if their Hubei-located suppliers failed to resume work before they used up parts inventories.

Hubei's situation also disquiets domestic OEMs. For example, GAC Group conveyed similar worries, highlighting to the MIIT that 156 of the country's 400 suppliers are based in Hubei.

As of March 11, 90.1% of 23 auto companies covered by a survey made by the China Association of Automobile Manufacturers (CAAM) have resumed operation and roughly 40% have restarted production, the CAAM said on March 12.