Adversely affected by the spread of the local epidemic in March 2022, many domestic automakers were forced to stop production. At the same time, some auto parts suppliers that play an important role in the entire automotive industry chain have also been greatly impacted by the epidemic. Looking at the entire automotive industry chain, it is not difficult for us to find that the volume and scale of related auto parts suppliers are different, but in the face of the impact of the epidemic, the days of some parts companies with greater influence in the industry are not much better.
As a global auto parts giant, Bosch has stopped production several times since the outbreak of the epidemic in 2020. As early as February 19 this year, a Bosch employee in Suzhou was unfortunately diagnosed. According to the requirements of epidemic prevention and control, Bosch Suzhou immediately adopted a closed-loop management and office staff working from home model, and did not end working from home until February 28. Affected by this incident, Great Wall Motors and Changan Automobile both experienced shortages in auto parts supply in February 2022, and sales of the two car companies even fell by 20% and 15% in February.
In August last year, due to the epidemic in Malaysia, the local production line of the doctor was forced to stop production, so the domestic car companies also had a dilemma of insufficient supply of vehicle-grade chips. In Shenzhen Huaqiang North, some speculators who sell iPhone water machines have even participated in the wave of "chip speculation". From a common sense point of view, what domestic car companies should do seems to be to ensure the inventory supply of auto parts as much as possible. However, the fact is that in recent years, many domestic car companies have been very keen to emulate the "zero inventory" management model adopted by Japanese car companies such as Toyota and Honda. However, in the face of the "supply cut-off risk" brought about by the epidemic, the ability of car companies to hedge risks is also facing a severe test.
It is worth mentioning that Li Xiang, the founder of Ideal Auto, said online on April 18 that in addition to solving the problem of previous parts supply, car companies should also analyze and check small and medium-sized parts suppliers including level three, level four and level five. Where necessary, assistance and support should also be provided to small and medium-sized component suppliers.
It is true that in the pre-epidemic automotive industry chain, car companies do not need to consider docking with small and medium-sized parts suppliers. Because in more often, tier 1 suppliers can objectively help car companies to ensure the production efficiency of small and medium-sized parts suppliers. However, in such an extraordinary period as the epidemic, car companies should also know how to take extraordinary measures to deal with it.
Not long ago, He Xiaopeng and Yu Chengdong posted in the circle of friends one after another, bluntly saying that if the relevant enterprises in Shanghai and surrounding provinces and cities cannot resume work and production smoothly, then all domestic automakers will fall into the predicament of stopping work and production in May. In the first batch of key enterprises released by Shanghai on April 17, the proportion of supporting enterprises in the automotive industry chain exceeded 70%, which shows that the local epidemic has also brought a lot of impact to the local automotive industry chain in Shanghai. It is worth affirming that while doing a good job in epidemic prevention and control, the relevant departments have not forgotten to do a good job in resuming work and production in Shanghai's local automobile industry.
Judging from the feedback from the investment market, the outside world is also full of confidence in the resumption of work and production of the local automotive industry chain in Shanghai. In the A-share auto parts sector, since the reopening of the market on Monday, April 18, the entire sector has shown signs of correction. It can be seen that the outside world is also very much looking forward to more recovery signals in the auto parts industry.
For local car companies that want to do more in 2022, the local epidemic since the beginning of this year is destined to allow them to learn more lessons from it. In an interview with reporters, Zhang Xiang, dean of the New Energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, also pointed out 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 local suppliers with larger scale and strong funds, so as to reduce the risk of supply interruption as much as possible.
In fact, from the chip shortage in 2021 to the supply shortage in 2022, these unfavorable factors are a more severe test for many local car companies. Compared with the chip shortage in 2021, the supply shortage in 2022 has also brought more serious impacts to many car companies. In 2021, automakers can deliver new cars that are not equipped with chips to customers by delaying deliveries or delivering them early. However, in 2022, the tide of supply disruption has caused car companies to stop the current production line.
It is believed that this wave of local epidemic has also given more car companies the opportunity to rethink their supply chains. In the past, they may not need to have too much contact with small and medium-sized auto parts suppliers in the third, fourth and fifth lines, but now, they should learn to go deeper into the industrial chain and more links in the supply chain to ensure that they can be most fully prepared in the face of the crisis.