Most of auto companies outside key infected regions resume operation, MIIT

Shanghai (Gasgoo)- Although the combat against the novel coronavirus has not ended yet, most automotive companies outside key affected regions have resumed operation and manufacturing businesses, according to the China's Ministry of Industry and Information Technology.

As of March 3, 84.1% of production bases owned by 16 key complete vehicle groups in China have restarted operation, the ministry said. Besides, roughly 66.5% of employees covered by the survey have returned to work.

China's companies encountered an extended shutdown due to the coronavirus epidemic. With the situation turning around, OEMs outside Hubei province have been gradually resuming businesses in an orderly manner.

On Feb. 24, Toyota's Chengdu plant restarted production. Along with the plants in Changchun, Guangzhou and Tianjin which were reopened earlier, Toyota has entirely resumed its China manufacturing business.

(Photo source: SAIC Volkswagen's WeChat account)

In addition, SAIC Volkswagen, the one of biggest PV joint ventures in the country, has also seen the relaunch at its plants in Yizheng (Jiangsu), Anting (Shanghai) and Changsha (Hunan) in late Feb.

Other major OEMs, such as FAW-Volkswagen, SAIC-GM, Geely, Great Wall Motor, BYD, Mercedes-Benz, BMW and Tesla, all announced business resumption between Feb. 10 and Feb. 17.

However, the wave of resumption has not touched enterprises in Hubei province as the government requested them to halt operation at least until March 10.

On auto dealers' side, the VIA (Vehicle Inventory Alert Index) stood at 81.2% in Feb., a record high level for the past 26 months at least, according to the China Automobile Dealers Association (CADA).

Hit by the coronavirus epidemic, most of 4S stores kept shutdown during the first-half month. Some of them resumed operation from the third week and over 70% dealerships have reopened business as of the last week.

Nevertheless, the nice return-to-work ratio isn’t equal to nice sales. Given the traffic restrictions and purpose for epidemic prevent and control, the majority of consumers still opted to stay indoors, so that much fewer cars were sold and the maintenance service were less offered.

To weather the coronavirus-caused hardship, automobile dealers have strengthened the online marketing business through various network tools, such as VR showroom, live-streaming platform and WeChat community. They attempted to sell cars and provide after-sale services through the “contactless” forms. Nonetheless, the efforts bore little fruit due to the demand nosedive. What's more, dealers were generally saddled with a heavier capital pressure as the large amount of inventories led to a slower withdrawal of funds.