Shanghai shutdown threatens to halt car production in China

Chinese automakers have warned that they may have to suspend production if the COVID-19 lockdowns continue in Shanghai, while a senior Huawei group official warned Friday of chronic supply chain problems.
Sanitary restrictions imposed by Shanghai to combat the spread of the epidemic have forced the city’s 25 million residents to stay indoors for weeks, prompting manufacturers to halt operations and making China’s target GDP growth of around 5.5 percent seem unattainable.
The giant shipping companies have also warned that the closure of Shanghai is leading to congestion at the world’s most important container port.
The spread of COVID-19 throughout the country and the decline in economic activity associated with it, has significantly affected the auto industry, with car sales down 10.5 percent in March.
“If supply chain companies in Shanghai and surrounding areas can’t find a way to quickly resume work and production, all OEMs may have to suspend production in May,” He Xiaoping, president of Sheping, wrote on social media.
Shiping is considered a Chinese competitor to the giant electric car maker Tesla, and its president said that the companies hope to obtain more support from the authorities to deal with the measures imposed during the closure period.
A senior official at the Chinese technology giant Huawei, which has begun working with local car manufacturers in the smart car sector, echoed similar statements Friday and warned that time was running out.
“If Shanghai is still unable to resume work and production from May, all technology and industrial companies that are part of the supply chain in Shanghai, especially in the Shanghai sector, will close,” Richard Yu, head of Huawei’s Consumer and Automotive Division, said on the WeChat social platform. Auto industry!”.
Also, port closures lead to logistical delays.
On Thursday, shipping giant Maersk spoke of “congestion at stations” in the Shanghai port.
(AFP)