SHANGHAI – China’s stringent zero-Covid-19 regime is once again upending its car manufacturing sector, with at least three major carmakers shuttering production because of virus restrictions.
Japan’s Honda Motor suspended its operations in Wuhan, the virus epicentre in early 2020 because of limitations around movement introduced in the area. Whether the plant will remain closed through Wednesday has not been decided, a spokesman said on Tuesday.
Honda also extended the suspension of operations at another plant producing engines for lawn mowers in Chongqing.
Motorcycle maker Yamaha Motor is partially suspending production at its motorcycle plant in Chongqing, where 8,721 new Covid cases were reported on Monday. Other Japanese carmakers including Nissan Motor, Mazda Motor and Mitsubishi Motors said their China operations have not been impacted yet.
Toyota Motor, the world’s No. 1 carmaker, is adjusting production at parts of its Chinese factories due to multiple factors, spokesman Shino Yamada said, declining to elaborate.
On Monday, German carmaking giant Volkswagen blamed a component shortage as the main factor behind the decision to halt production at a joint venture plant that it has with China FAW Group in Chengdu and two of five production lines at its factory in Changchun. There are currently no estimated dates for resumption and no plans to move to so-called closed-loop operations, a spokesman said.
First used during the Beijing Winter Olympics as a way of keeping athletes and support staff separate from the wider population, closed-loop systems, or factory bubbles, are a China invention used to keep businesses running amid punishing efforts to stamp out Covid-19’s spread. They typically require workers to travel from on-site accommodation to a factory and back, strictly avoiding contacts with outsiders.
Several carmakers, including Volkswagen and Tesla, used them earlier this year, with the American electric vehicle maker making headlines for even insisting workers sleep on the floor during the months-long Shanghai lockdown. But the system has faced challenges recently, with workers at the world’s biggest iPhone factory in Zhengzhou pushing back at restrictions, impacting plant production.
Public anger over China’s draconian approach to stamping out infections has risen in recent weeks, with the authorities deploying a heavy police presence in the capital Beijing and other major cities to deter a repeat of demonstrations that broke out over the weekend. That may make companies less willing to keep employees effectively locked up on site for extended periods.
The demonstrations were sparked off after 10 people were killed in an apartment block fire in Urumqi, the capital of Xinjiang, a city that has been under lockdown for more than three months. Some citizens have questioned whether Covid-19 controls hampered rescue efforts and protestors have expressed opposition to the wider Covid-19 policy. BLOOMBERG
