The latest statistics from the China Association of Automobile Manufacturers last week showed that domestic automobile production and sales still maintained positive growth in the first quarter of this year, but the 0.2% sales growth rate made many people quite worried. Although some analysts are still cautiously optimistic about the production and sales of automobiles throughout this year, the recent epidemic has led to the suspension of work and production of many domestic automobile manufacturers and suppliers, which has further increased the risks and pressures faced by the automotive industry, which is bound to adversely affect the production and sales of automobiles in the first half of this year and even the whole year.
Recently, the two circles of friends have aroused widespread concern about the suspension of work and production in the automotive industry.
"If supply chain companies in And around Shanghai can't find a way to dynamically resume work and production, all Chinese automakers may have to stop work and production in May." On the evening of April 14, this circle of friends of He Xiaopeng, chairman of Xiaopeng Automobile, expressed the concerns and worries of many people in the industry.
Yu Chengdong, CEO of Huawei's consumer business and CEO of Smart Car BU, also posted in the circle of friends that if Shanghai cannot resume work and production, all technology and industrial industries involving Shanghai's supply chain after May will be completely stopped, especially the automobile industry.
Although He Xiaopeng said in the circle of friends that the relevant ministries and commissions and competent departments are doing their best to coordinate, but from a realistic point of view, because it is uncertain when this wave of epidemic will end, and the automobile industry is a systemic industry with a wide range of aspects and strong relevance, some OEMs and suppliers will reduce production and production, which is bound to have a serious impact on the automotive industry chain and will also affect automobile production and sales in the coming months.
The shutdown is grim
The epidemic has spread widely, the sealing and control area has been expanded, the flow of personnel and logistics have been restricted to a certain extent, almost all car companies and major suppliers are facing pressure from the production and delivery levels, and some car companies have fallen into the dilemma of stopping work and production. This grim situation is second only to the beginning of 2020.
In late March, SAIC-GM, SAIC Volkswagen and other plants cut production or even suspended production. Volkswagen's plants in Changchun and Shanghai were discontinued. At present, the Changchun plant has fully resumed work, and the Shanghai plant has stopped production since April 1, and has not yet fully resumed work, and automobile production and later deliveries are bound to be affected.
Tesla's Shanghai Gigafactory has been shut down since March 28, and there is no clear news of the resumption of work. Great Wall Motors also said that due to the current impact of the epidemic in Shanghai, Jiangsu, Jilin and other places, many parts suppliers of Great Wall Motors have been affected, resulting in limited output of factories.
On April 9, WEILAI Automobile said that due to the epidemic, supply chain partners in Jilin, Shanghai, Jiangsu and other places have stopped production one after another. Affected by this, WEILAI suspended vehicle production. On April 14, NIO's Hefei production base gradually resumed production from April 14, but the follow-up production plan depends on the recovery of the supply chain.
On April 13, Great Wall Motor's tank brand said that due to the impact of the epidemic in Shanghai, Jiangsu, Jilin and other places, 8 supplier partners of the tank 300 model stopped work and operation, and the production of the tank 300 model was suspended from April 14.
Not only are some OEMs in trouble, but parts manufacturers in many areas of Jiangsu and Zhejiang are not optimistic, and the supply is difficult. The international automotive supplier giants of Bosch, ZF and Aptiv all have factories in Shanghai. In addition, the automotive industry chain covers more than 100 enterprises in the fields of engines, power batteries, chips, body interiors and exteriors, and many are also facing difficulties.
Generally, car companies will have spare parts reserves, but considering factors such as capital and cost, coupled with mutual trust in years of cooperative relations, there is usually not much inventory. If the supply chain partner is unable to supply it subsequently, it will have a direct impact on downstream vehicle production.
Bosch said in a statement on April 11 that in order to comply with the epidemic prevention and control measures, a factory that produces domestic hot water systems in Shanghai and an auto parts factory in Jilin have suspended production. However, Bosch's auto parts factories in Shanghai and Taicang are still producing in closed loops.
Bosch said that it is currently doing everything possible to maintain the supply chain, seeing the temporary impact of epidemic prevention and control measures on logistics and supply chain procurement.
Multiple shocks work together to influence the results
Since the beginning of 2020, the automotive industry's supply chain has faced unprecedented challenges. From the COVID-19 pandemic, the chip crisis, high oil prices to geopolitical conflicts, the entire automotive industry has been greatly affected in 2021, and it is still continuing in the first quarter of 2022.
The current dilemma facing the automotive industry is the result of the combined impact of multiple shocks, starting with the current round of covid-19 at multiple points.
Unlike previous outbreaks in the hardest hit areas, this wave of outbreaks has occurred in Shanghai and Jilin Province. These two places are respectively the headquarters of SAIC and FAW, and are also important R&D and production bases in the domestic automobile industry, with mature automobile industry clusters, which have a decisive impact on the domestic automobile market. Data show that in 2021, the production and sales of automobiles in Jilin and Shanghai will account for a quarter of the national total.
Secondly, the cloud of "lack of core" in the car has not yet dissipated. With the continuous iteration of the level of automobile intelligence, especially the explosive growth of young users, the demand for high-end chips in domestic cars has increased significantly, which undoubtedly magnifies the dilemma of lack of core in the industry.
Compared with traditional fuel vehicles, the degree of electronic and intelligent new energy vehicles has been greatly improved, and the demand for high-end chips has also increased significantly. The explosive growth of the domestic new energy market has increased the contradiction between chip demand and supply and demand.
Third, domestic automobile production is also affected by geopolitics. The current Russian-Ukrainian conflict has undoubtedly disrupted the international supply of raw materials such as neon gas and palladium needed for chip production, resulting in a further aggravation of global chip shortages. In the process of chip production, the inert gas neon gas is indispensable. Russia and Ukraine are both producers of neon gas, and Ukraine supplies nearly 70% of the world's high-purity neon gas.
The imbalance between supply and demand at the terminal will continue
The reduction of production and production in the automobile industry not only causes economic pressure on related enterprises, but also exacerbates the current car delivery problems caused by insufficient chip supply.
It is understood that the current Great Wall tank series has accumulated undelivered orders of up to 140,000 vehicles, and the pick-up cycle has been more than half a year. The shutdown of Tesla's Shanghai factory directly led to Tesla's approximately 26,000 fewer deliveries, and deliveries continued to be postponed.
In stark contrast to the automotive supply side, which is under pressure, is the consumer side, where demand continues unabated. Under the pressure of supply chain pressure, subsidy decline, new energy vehicle price increases and other multiple pressures, the domestic passenger car market still achieved double-digit growth in the first quarter, and the new energy market continued to soar.
At present, major car companies and parts suppliers are trying to overcome difficulties. On April 11, the Ministry of Industry and Information Technology coordinated the smooth flow of the automotive supply chain and launched the "Automotive Industry Chain Supply Chain Smooth Coordination Platform" to solicit the practical difficulties currently faced by auto companies and supply chain enterprises across the country.
Some analysts believe that although the epidemic has led to the suspension of work and production of some car companies, resulting in a short-term decline in automobile production and sales, the demand for automobiles has not changed. The impact of the epidemic on industry terminals will only delay demand and will not disappear. It is expected that with the gradual control of the epidemic and the full resumption of work and production of automobile enterprises, China's automobile production and sales may still achieve low growth in 2022. (End)
(This article was published simultaneously to China Automotive Trend Network)