Top manufacturers have started to bring their factories in China back on line after closure due to Covid-19 lockdowns. In a statement, Toyota said, “we have been gradually preparing to resume operations in our Changchun plant since last week. However, the timing for a full-scale operation has yet to be determined.”
Therefore Toyota will resume its operations soon in Changchun, Jilin Province, after suspending its production on March 14. This is one of the largest auto manufacturing hubs in China.
Volkswagen restarted its production in Changchun on Monday after closing its plants in mid-March. However, the Shanghai factory (run in partnership with SAIC – a state-owned automaker) remains closed. In a statement, Volkswagen said, “The feasibility of SVW Anting plant [in Shanghai] resumption is under evaluation.”
Similarly, Tesla was preparing too to resume its production at its Shanghai plant following its three-week stoppage. The electric car maker recalled its workers in preparation for the resumption of its production on Monday. However, this changed because one of its suppliers was experiencing logistical issues, so one of its production shifts will resume on Tuesday.
The Chinese authorities locked down a couple of its major cities and millions of people due to the worst Covid outbreak in China in two years. Shanghai and Jilin were some of the places put under strict lockdown, which delayed shipments. The lockdown affected the supply of automobiles at a time when their global demand was getting stronger.
Further, these stringent Covid curbs negatively affected the country’s economic activity because unemployment rose while consumption dropped. The lockdown grounded business in most of China’s populous cities and rattled global supply chains. Additionally, residents who were tired of the lockdown complained of difficulties securing food due to poor conditions in some quarantine centers, lost incomes, and separated families.
Because of that Jilin government promised over the weekend to permit companies to resume production. The province had managed to eliminate the community spread of the virus in the non-quarantined areas.
On the other hand, Shanghai was put under lockdown for over three weeks since it was the epicenter of the new Covid outbreak. The Shanghai government wants to ease disruption; thus, on Friday, the authority published a list of 666 companies that can resume production. Almost 40% of these were automakers and their suppliers. However, the government didn’t state when these companies could resume their production.
Additionally, SAIC Motor, which partners with General Motors and Volkswagen, began the stress testing of its production plans in order to resume production on Monday.