Since the outbreak of the epidemic in 2020, auto parts giant Bosch has not had an easy time in the past two years.
Recently, the first financial reporter learned that Bosch Auto Parts (Suzhou) Co., Ltd. (hereinafter referred to as "Bosch Suzhou") notified employees that because the recent domestic epidemic prevention and control situation is still severe, it will continue to maintain the current epidemic prevention measures unchanged, and everyone will do a good job of working from home that may last until the end of this month. Since March 14 this year, Bosch Suzhou has implemented epidemic prevention measures such as home work for eligible employees and strict implementation of factory entry requirements for workers.
Previously, Bosch Suzhou had staged a similar plot, and on February 19 this year, one of its employees was diagnosed, and also adopted a closed-loop management and office staff working from home model, until February 28, when it ended working from home. It is affected by this that the supply of parts for the Great Wall and Chang'an in February is insufficient, and the sales volume of the month fell by 20% and 15% respectively year-on-year.
The new round of the epidemic in March this year has a wider impact on the automotive supply chain and lasts longer, which has made the automotive industry miserable. Xiaopeng CEO He Xiaopeng bluntly said that if supply chain companies cannot find a way to dynamically resume work and production, all Chinese automakers may have to stop work and production in May.
An executive of an independent car company told the first financial reporter that he could not sleep every day, because the automotive supply chain was too long and too many processes, and it was indispensable, and the pressure of "guaranteeing supply" was very large.
How much impact will this round of the epidemic have on the automotive industry chain?
Since March this year, the outbreak of the epidemic in many parts of the country, such as Shanghai and Changchun, Jilin Province, has also escalated the epidemic control measures.
Affected by this, Bosch relevant people told reporters that Bosch's two auto parts production bases in Shanghai and Taicang are produced through "closed-loop management". In addition, Bosch's automotive plant in Changchun, Jilin Province, has temporarily stopped production. At the same time, Bosch is also facing temporary impacts on logistics and supply chain procurement.
According to the information on Bosch's official website, Bosch auto parts have important layouts in the Yangtze River Delta and Jilin Province, basically covering Bosch's main products. Among them, United Automotive Electronics Co., Ltd. is a joint venture company of Bosch, headquartered in Shanghai, the business scope includes engine management system, transmission control system, hybrid and electric drive, body electronics; Bosch Suzhou has automotive electronics division, chassis control division, automotive multimedia division and equipment manufacturing division; Bosch Automotive Parts (Nanjing) Co., Ltd. Main products are spark plugs, brake pads and automotive diagnostic equipment, is the largest spark plug manufacturing base of Bosch Group Bosch Powertrain Co., Ltd. is located in Wuxi, focusing on internal combustion engines, hybrid vehicles and electric vehicles, while Bosch Automotive Components (Changchun) Co., Ltd. is engaged in the research, development, manufacture and sales of automotive starters, generators and electronic drive systems and their components.
According to some data, Bosch's ESP products occupy 70% of the market share in China, while the ESP assembly rate of mainstream OEMs is more than 80%.
Bosch plays an important role in Tier1 (the first-tier supplier of the depot), which is the core parts supplier of mainstream car companies such as FAW, Changan, BMW, Weilai, and Great Wall, and even the exclusive supplier of some products of some car companies.
On April 9, NIO announced that since March, due to the epidemic, the company's supply chain partners in Jilin, Shanghai, Jiangsu and other places have stopped production one after another and have not yet recovered. Affected by this, NIO vehicle production was suspended.
On April 13, Great Wall's tank brands also released news that due to the impact of the epidemic in Shanghai, Jiangsu, Jilin and other places, the tank 300 models involved a total of 8 supplier partners to stop work and stop operations, and more than 30 cities and counties are currently suspending shipments. Therefore, production of the Tank 300 model will be suspended from April 14.
Some faw and BMW plants have also announced the suspension of production during the Changchun epidemic.
The executives of the above-mentioned independent car companies told reporters that at present, the recurrence of the epidemic, the shortage of chips, and the sharp rise in raw material prices are like the "three mountains" pressed on the car companies. Local epidemic prevention and control measures not only directly affect the production of supply chain factories, but also lead to logistics stagnation or low efficiency, and for car companies, parts and components actually mean that the lack of a component is "zero", and the pressure of "guaranteeing supply" of car companies is very large.
It is worth mentioning that Shanghai and Jilin have begun to promote the resumption of work and production in an orderly manner. FAW's Hongqi Ulsan plant has taken the lead in resuming work and production, 47 of the first batch of suppliers have also resumed production at the same time, and other OEMs and parts companies that have stopped production have also prepared to resume work in advance and will resume production in an orderly manner in batches. The Shanghai Municipal Commission of Economy and Information Technology recently officially issued guidelines for the prevention and control of the epidemic in industrial enterprises resuming work and production, and in addition, the Ministry of Industry and Information Technology has sent a working group in Shanghai to focus resources on priority to ensure that 666 key enterprises, including automobile manufacturing, resume work and production.
On April 18, a Bosch insider told reporters that its production base in Shanghai maintained the previous closed-loop production, and the Changchun factory, which had been suspended, also resumed closed-loop production, but there were still challenges in logistics and supply chain problems.
At present, the automobile supply chain is still largely constrained by logistics, and the raw materials outside some cities cannot be transported in, and the finished products inside cannot be transported out.
Bosch has been repeatedly hit by the pandemic
As the world's largest auto parts manufacturer, Bosch has been hit by the epidemic many times.
On February 19, a Bosch employee in Suzhou was diagnosed with a closed-loop management and office staff working from home model, and did not end working from home until February 28. Bosch once told reporters that due to the impact of the epidemic in Suzhou, it expects its production and logistics operations in Suzhou to be affected in the short term, and has notified relevant customers at the first time. At the same time, the Bosch team in Suzhou is planning for various possible situations in order to minimize the impact on customer supply.
The impact of the Suzhou epidemic on Bosch alone has been quickly transmitted to many car companies.
Among them, the Great Wall publicly pointed out that the company's sales fell by 20.5% to 70,000 units in February, one of the reasons is the insufficient supply of bosch suzhou production of body electronic stability system (ESP). Bosch's ESP is the exclusive supplier of Great Wall's main models.
In the same month, Changan's sales also decreased by 15.1% y/y to 138,000 units, of which Hefei Changan fell 46.6% year-on-year to 26,700 units. A document titled "Report on the Serious Shortage of Sales Resources Caused by insufficient supply of Core Suppliers such as Bosch" also pointed to the decline in Chang'an sales to Bosch Suzhou. According to the documents, due to the continuous shortage of core-related parts, Changan Automobile has been in serious shortage of materials including Bosch airbag controllers and EPBI since February, which has ultimately led to a continuous sharp decline in production and a serious shortage of market terminal resources.
In fact, because of the globalization of the automotive supply chain, the epidemic in other parts of the world may also impact the domestic automotive industry.
In August last year, Bosch was affected by the epidemic in Malaysia, which led to a large-scale supply of chips from domestic car companies, and at that time, it also triggered a sharp rise in the price of black market chips. Xu Daquan, executive vice president of Bosch China, once said on social media that due to the serious epidemic in Malaysia, the production of a semiconductor chip supplier's Malaysian Muar factory has been hit hard, which will lead to a direct impact on Bosch ESP/IPB, VCU, TCU and other chips, and it is expected that the follow-up will be basically out of supply in August last year, which will have a huge impact on China's automotive industry.
According to the China Automobile Association, in August last year, the production and sales of mainland automobiles were 1.725 million units and 1.799 million units, down 18.7% and 17.8% year-on-year, respectively; in September last year, automobile production and sales were 2.077 million units and 2.067 million units, down 17.9% and 19.6% year-on-year, respectively.
First Finance and Economics has reported that when bosch ESP chips are out of supply, the quotation on the black market rose to about 4,000 yuan / piece, while the usual normal price was only 13 yuan / piece, an increase of more than 300 times.
The pandemic has put supply chains in new tests
The Yangtze River Delta has formed an automobile industry cluster, according to incomplete statistics, there are tens of thousands of auto parts companies in the region, in addition to Bosch, there are foreign-funded parts giants such as Aptiv, ZF, Schaeffler, Continental, and a large number of Local Chinese parts suppliers, including Baolong Technology, Joyson Electronics, Azure Power, etc.
In addition to Bosch, many auto parts "big factories" have been affected by this round of epidemic, Continental pointed out to reporters that although it has adopted a "closed-loop production" model, according to the epidemic prevention policy, Continental only some employees can return to the production line, so the production capacity will be relatively reduced. A few days ago, Aptiv, the largest supplier of wiring harnesses in China, was also hit hard by the epidemic.
At present, the suspension and reduction of some core components in the automotive supply chain have an increasingly prominent impact on the automotive industry.
"Shanghai and Changchun are the headquarters of china's two largest automobile groups (SAIC Group and FAW Group), in general, the core parts and components enterprises will be distributed accordingly at the headquarters location, so the core parts and components enterprises in Shanghai and other regions will also lead to the impact of industry radiation due to the epidemic, and the main engine factories in Anhui, Jiangsu and Zhejiang also need to supply the core parts and components enterprises located in Shanghai." If the impact of the epidemic continues, it may bring uncertainty to more enterprises across the country. Cui Dongshu, secretary general of the Association, said.
Some insiders pointed out that the previous Japanese lean production system was widely learned by local car companies, and the zero inventory management advocated by the Japanese system also allowed some car companies to consume parts inventory quickly when the supply chain was temporarily "cut off", so there was a phenomenon of suspension of production; in addition, the risk of exclusive suppliers was also particularly prominent during the epidemic. After several rounds of the epidemic, the supply chain management of domestic car companies may usher in changes.
Cui Dongshu also pointed out that enterprises urgently need to establish effective risk monitoring capabilities in the existing supply chain system to quickly and accurately assess the impact of major risks on the sales and profits of enterprises, and formulate corresponding emergency measures, which will become an inevitable move for strategic planning, management and implementation of enterprise supply chains. In order to further enhance the resilience of enterprises in the complex environment, enterprises also need to improve the corresponding core capabilities: supply chain strategic design, dynamic integrated supply chain planning, end-to-end supply chain data transparency and collaboration, and operation mode optimization.
Zhang Xiang, dean of the New Energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, told reporters that after the epidemic, higher requirements have been put forward for the supplier management of car companies, and he suggested that car companies should try to choose two or more suppliers with large local scale and strong funds, so as to reduce the risk of supply interruption as much as possible.
In fact, many car companies have already made improvements in the above supply chain management direction. Zhang Xiang pointed out that in May last year, the ideal 2021 ideal ONE model was equipped with a horizon "Journey 3" automatic driving chip, replacing the previous relative Mobileye chip solution. However, Zhang Xiang also said that car companies will face many conditions and constraints at the specific operational level, such as the right to speak and the ability to fund some OEMs that have not been established for a long time and are not large in the selection of suppliers.