Although Shanghai began prioritizing more than a few hundred companies to start work in mid-April, foreign business firms say this does not mean that factories can operate at full capacity.
Tian Yuhao | China News Service | Getty Images
BEIJING – Auto production fell in April as coveted lockdowns shut down almost all non-essential businesses in the Shanghai metropolis, according to a report by the China Passenger Car Association.
Shanghai’s five largest car companies saw a 75% drop in production in April compared to March, the association said in a report on Tuesday. Production in a joint venture of major foreign automakers in the northern city of Changchun – which was temporarily locked down for covid control – fell 54% at the time, the report said.
Nationwide, China’s passenger car production also declined in April, down 41.1% year-on-year and 46.8% year-on-year, the report said.
According to 2018 official figures compiled by the Ministry of Commerce, China’s auto sector accounts for about one-sixth of jobs and about 10% of retail sales.
According to City, Shanghai is home to many auto producers: SAIC Motor, a joint venture of SAIC with Volkswagen and GM, Nio, Tesla and Ford.
Shanghai sincerely started the lockdown towards the end of March.
Although the city began prioritizing hundreds of companies to resume work in mid-April, foreign businesses say this does not mean that factories can operate at full capacity. Suppliers may also be closed or unable to transport parts.
Tesla’s Shanghai Gigafactory, which was reopened with much fanfare about three weeks ago, remains a subject of ongoing coward uncertainty.
This week, the company had to cut production in Shanghai due to covid-related problems, according to Junheng Lee, CEO and research director at JL Warren Capital. Due to the Covid, a supplier had to be temporarily shut down, limiting the availability of parts for the Tesla Model Y.
Tesla did not respond to a request for comment.
– CNBC’s Laura Collodney contributed to this report.