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Automobiles

China's auto industry stuck below 40% of production capacity

Parts and labor shortages delay post-coronavirus recovery

Most assembly plants in China are back online, but they are operating at less than half of capacity due to a shortage of parts and labor.   © Reuters

BEIJING -- Chinese auto manufacturers are operating at less than 40% of capacity, even with most of their production facilities back online, an industry group said Thursday.

The China Association of Automobile Manufacturers reported that 90% of factories operated by the 23 companies that make the vast majority of the country's new vehicles had restarted by Wednesday, with 18 automakers being fully up and running.

But parts shortages have kept manufacturers from making full use of this capacity. In Zhejiang Province, where the new coronavirus took a heavy toll, Zhejiang Yinlun Machinery and Wanxiang Group have restarted just 67% and 82% of their plants, respectively.

Automakers with operations in Hubei Province -- the epicenter of the outbreak -- have been slower to get back on their feet.

Dongfeng Motor Group, based in the provincial capital of Wuhan, has reopened only half its plants. Authorities gave the company the green light to resume operations Wednesday, but strict limitations on individual movement have left the automaker without enough workers to staff all its factories.

Guangzhou Automobile Group, SAIC Motor and BYD also came in below average with around 80% of plants operational, likely owing to labor shortages in Wuhan.

Though the Chinese association did not give a full-year forecast for auto production at its news conference Thursday, the group indicated that output and sales bottomed out in late February. Business began rebounding this month and will return to normal in the July-September quarter, the association said.

An industry group focused on passenger vehicle manufacturing projects an 8% decline in sales volume this year.

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