Crisis in China: Coronavirus, Cars, and Components
Coronavirus is a contagious, airborne virus that originated in Hubei, China on New Years Eve and presents itself like pneumonia. 6 weeks later Coronavirus has now killed over 1000 people worldwide and infected over 42,000 in 22 countries. The World Health Organisation (WHO) has declared a global health emergency over it and several major Chinese cities have been shut off from the outside world.
How is Coronavirus related to the automotive industry you might ask? How does an infectious disease that came from a bat in a Chinese cave affect vehicles on British roads?
Well. For one prominent British brand – Jaguar Land Rover – the global coronavirus outbreak is expected to cause supply shortages affecting global vehicle production volumes and their fourth-quarter financial performance.
This expectation follows a wave of factory shutdowns in China following the outbreak of the virus. JLR’s parent company Tata has been forced to extend a shutdown at the Chery Jaguar Land Rover factory in Changsu, 1000km from Hubei. The factory is responsible for building the Evoque, Discovery Sport and Jaguar E-Pace for the Chinese market.
Factories outside of China have also been affected; Hyundai was forced to shut it’s South Korean factories last week due to a shortage of critical wiring harnesses produced in China. Additionally, Nissan has closed one of its Japanese factories due to a shortage of components imported from China.
Yesterday the Chinese New Year Holiday came to an end, but labour shortages and local legislation designed to restrict the spread of the virus remain in-force and further restrict the reopening of factories.
Will Coronavirus bring automotive giants to their knees? Stay tuned to find out!