More than two dozen car companies shut down production, with Dongfeng Honda the most injured! Hubei car companies under the epidemic

Car Stuff

Wen? |?James

This Spring Festival vacation, the whole country is united to resist the epidemic. People have donated money and goods to show their love. In Wuhan, the city where the epidemic is most serious, the whole city is closed, but the love from all over the country gathered here, making us feel that this winter is not so cold.

Wuhan is the transportation hub of "nine provinces" and also the major town of China's automobile manufacturing industry. The headquarters of Dongfeng Motor, a number of Dongfeng joint-venture plants, and the SAIC-GM plant are all located in Wuhan. In addition, Bosch and Webasto, suppliers to the automotive manufacturing industry, have parts factories in Wuhan, providing steering systems and other automotive parts around the world.

The outbreak, which was concentrated during the Spring Festival holiday, is now also having an impact on the resumption of work by companies after the Spring Festival. At present, all factories in the automobile manufacturing industry located in Wuhan City are shut down and are expected to resume work only on February 14 at the earliest. Wuhan's automobile manufacturing industry has had to come to a temporary halt due to the ongoing ravages of the epidemic. This shutdown of at least three weeks will have a considerable impact on Wuhan's automobile manufacturing industry, and even on the country's automobile manufacturing industry.

I. Hubei automobile enterprises more than a thousand? Passenger car annual output of more than 2 million vehicles

Hubei Province is the hardest hit by the epidemic, at the same time, Hubei Province is also one of the centers of China's automobile manufacturing industry. Affected by the epidemic, the province's automobile manufacturing industry is now basically all shut down. According to data released by the Hubei Provincial Bureau of Statistics, in 2018, there were 1,490 automobile manufacturing enterprises*** in Hubei Province, and the total industrial output value reached 728.938 billion yuan in that year, accounting for 17% of the total value of the province's manufacturing industrial output value. At present, the number of people employed in the automobile manufacturing industry in the province of Hubei reaches 420,000 people. According to data released by the National Passenger Vehicle Market Association, in 2019, Hubei province's passenger vehicle production reached 2.24 million units, accounting for about 10% of the country's total output.

Wuhan, the city where the outbreak was most severe, is the center of the province's auto manufacturing industry in Hubei. Wuhan, one of the country's six largest passenger car bases, brings together four major car lines: Chinese, French, American and Japanese. In 2018, Wuhan's automobile output was 1.7 million units, and the output value of the automobile and parts industry amounted to 400 billion yuan, making it the No. 1 pillar industry of Wuhan's economy for the ninth consecutive year, according to the Wuhan Automobile Industry Development Office.

It is understood that there are a number of car companies and auto industry suppliers have manufacturing plants in Hubei province. Currently, there are 20 vehicle manufacturers in Hubei Province***, including 12 in Wuhan, accounting for more than half of the province. In addition, Shiyan and Xiangyang are also important automobile production areas in Hubei.

▲Dongfeng Group's headquarters in Wuhan

Dongfeng Group's headquarters is located in Wuhan, where one of its passenger car factories was built, and most of its other passenger car and commercial vehicle factories are also located in Hubei province. In addition, Dongfeng Group's joint ventures Dongfeng Peugeot, Dongfeng Citroen, Dongfeng Renault and Dongfeng Honda all have their vehicle plants in Wuhan. In addition, SAIC-GM, JAC, BYD and Golden Dragon Bus all have plants in Wuhan.

In the rest of Hubei, Xiangyang city has passenger car and commercial vehicle factories of Dongfeng Group, and Dongfeng Peugeot, Dongfeng Citroen and Dongfeng Nissan vehicle factories of Dongfeng's joint ventures are also located in Xiangyang city.

In Hubei's Shiyan, car companies such as Dongfeng Group, Danyun Automobile and Sanhuan Automobile have built factories; in addition, there are also automobile factories of some companies in Suizhou, Huanggang, Dazhi and Yichang.

Two, Wuhan, half of the number of car companies in Hubei? Dongfeng Honda is the most injured

Currently, among the car companies in Wuhan, Hubei, Dongfeng Group and its joint ventures have the largest scale and the highest production capacity.

1. Dongfeng Passenger Vehicle Company

Dongfeng Motor Group Passenger Vehicle Company's plant in Wuhan mainly produces Dongfeng Fengshen's fuel and new-energy vehicles, as well as Dongfeng series engines. Among the Dongfeng Fengshen models are the AX3, AX4, AX5, AX7, A9 and the E70 pure electric vehicle. The entire plant's design capacity can reach 215,000 units per year, and in 2018 this plant*** produced 85,000 complete vehicles.

2. Shenlong Automobile Company

Shenlong Automobile Company, which was established by Dongfeng and PSA Group, is is another car company that has been greatly affected by the epidemic. Currently, Dragon has three plants in Wuhan***, the first with a capacity of 300,000 units per year, the second and third with 150,000 units per year, for a total capacity of 600,000 units.

However, due to the cold car market in the past two years, Shenlong Motor's Wuhan third plant has now ceased production.In 2018, the annual output of Shenlong Motor's first and second plants in Wuhan amounted to 177,000 units.

▲Shenlong Motor's headquarters in Wuhan

Currently, Shenlong Motor's Wuhan plant mainly produces 18 models under three brands, namely Dongfeng Peugeot, Dongfeng Citroen and Dongfeng Fengshen. Among them, Dongfeng Peugeot has 8 models: 5008, 4008, 3008, 2008, 408, 308S, 308, 301***; Dongfeng Citroen has 8 models: C3-XR, C4 Sega, C6, C5, C4L, Alisha, Tianyi C5?AIRCROSS, Yunyi C4?AIRCROSS***; and Dongfeng Fengshen has 2 models: L60 and A9***. ***2 models.

3. Dongfeng Honda Plants

Dongfeng Honda, a joint venture between Dongfeng Group and Honda, is headquartered in the city of Wuhan, while all three of its vehicle plants are also located in Wuhan.In 2018, Dongfeng Honda's plant in Wuhan had an annual output of 740,000 complete vehicles.

▲Dongfeng Honda Wuhan second plant production line

Dongfeng Honda's first and second plants bear most of Dongfeng Honda's production capacity, the first plant mainly produces CR-V, Spectra, Allison models, with an annual output of 240,000 units; the second plant mainly produces XR-V, Civic, Goree, and Competition models, with an annual output of 240,000 units as well; the first phase of the third plant went into operation in 2019 April officially put into production, the current annual production capacity of 120,000 units, the second phase is expected to be officially put into production this year, when it will expand the production capacity of new energy vehicles.

4. Dongfeng Renault Plant

The Dongfeng Renault plant, a joint venture between Dongfeng Group and Renault, is also located in Wuhan, and currently employs about 2,000 people, with an engine production capacity of 150,000 units/year and vehicle production capacity of 150,000 units/year.

This plant mainly produces three models, the Dongfeng Renault Corribine, Corvette and Correga.In 2018, the Dongfeng Renault Wuhan plant produced 48,000 complete vehicles.

5. SAIC-GM Plant

In addition to Dongfeng Group, SAIC-GM also has a branch in Wuhan, and the company employs about 6,000 people. At present, the combined annual production capacity of the first- and second-phase plants is about 480,000 vehicles, and the annual engine output can reach 450,000 units, accounting for about 23 percent of SAIC-GM's total output.

Shanghai Automobile General Motors produces Chevrolet and Buick models in this plant. Chevrolet models include the Corvette, Pathfinder and Cruze, and it also plans to start production of the Smooth Cruiser electric car this year; Buick models include the Yinglang, Parade, GL6 and Micro Blue electric car.

▲Shanghai Automobile General Motors Wuhan Branch paint shop

6. Other car companies located in Wuhan

JAC Motor, BYD Auto and Jinlong Bus also have factories in Wuhan.

JAC mainly produces new-energy vehicles in Wuhan, and its annual output can reach 20,000 units.

BYD mainly produces new-energy commercial vehicles in Wuhan, including new-energy buses, with an annual output of up to 8,000 units.

In addition, Golden Dragon Bus produces pure electric buses in Wuhan, with an annual output of up to 10,000 units.

7. Subsequent impact on car companies

The most direct impact of the spread of the epidemic on car companies in Wuhan, and even Hubei as a whole, will be the daily loss of factory maintenance costs, as well as lengthening the vehicle delivery cycle, which will ultimately affect their own sales and revenues.

From the point of view of the scale of production and sales, the most serious impact of the epidemic belongs to Dongfeng Honda.

Honda is a hot-selling brand in China, where it sold more than 1.55 million units in 2019, up more than 8 percent. Dongfeng Honda, which has its headquarters and factory in Wuhan, has delivered a cumulative 788,000 vehicles in 2019, surpassing GAC Honda's 765,000, a year-on-year increase of 13.2 percent.

That means Dongfeng Honda's entire production capacity, more than half of Honda's capacity in China, is at a standstill if the outbreak doesn't end.

At the same time, the fact that the plant is not open will also make its new car delivery time longer, which in turn will affect the end sales.

Three, the spread of the epidemic so that OEMs lose a lot of money? New car listing or will be delayed

The spread of the epidemic will have a multi-party impact on Wuhan and car companies throughout Hubei.

First, the most direct impact is the daily loss of factory maintenance costs.

A few days ago, it was reported that Beijing Mercedes-Benz sent a letter to the Tianjin government applying for 19 supporting parts companies to resume work ahead of schedule to ensure that Beijing Mercedes-Benz's factories can operate normally.

Beijing Benz said in the letter that it would lose up to 400 million yuan a day if it could not resume work normally.

Operation and maintenance costs for other OEMs may not be as high as for a luxury brand like Mercedes-Benz, but they do at least show how much OEMs can lose by shutting down.

Secondly, it will affect the timing of deliveries in the auto market as Wuhan and Hubei are the latest to resume work.

Currently, the competition in the domestic auto market is quite fierce, and if the delivery time is lengthened, consumers are afraid of switching to sibling brands (e.g., from Dongfeng Honda to Guangzhou Honda), or even other brands, which will affect the company's sales after resumption of work, and ultimately affect revenues and exacerbate losses.

Credit rating agency Standard & Poor's predicted that China's auto production will fall sharply in the first quarter, and for the whole of this year, China's auto production will fall by 2 percent. 2019, China's auto production is about 25 million, according to Standard & Poor's prediction, the whole of this year, China's auto production will fall by 500,000 units.

In addition, the major automakers' plans to launch new cars will be affected as their research and development staffs are also at a standstill.

An engineer working for the Wuhan Dongfeng Group told Car Stuff that after the work stoppage, the company's ongoing trials of new car projects will need to be postponed. At the same time, because of the parts production and manufacturing will also lag, so even after the resumption of work, but also can not immediately carry out the corresponding research and development.

"That means a one-week work stoppage will actually cause the project to fall behind by more than a week." The engineer said this to Car Stuff.

▲CR-V hybrid

Honda announced earlier this year that it will introduce the SPORT?HYBIRD?e+ plug-in hybrid powertrain for the Honda CR-V to accelerate Honda's electrification efforts, as well as a two-box version of the Civic. Both of these upcoming new vehicles are built at the Wuhan plant.

Honda's new car program may also be delayed by the outbreak. In addition, the ongoing construction of the second phase of Honda's third plant project may also be affected.

Shenlong Automobile plans to put two models, the Peugeot 4008 and Citroen Tianyi PHEV, into production in May this year, and although they are planned to be produced at the Chengdu plant, the sudden stoppage of a large number of suppliers before production may also have an impact on the launch of the new cars.

Currently, the car market is highly competitive, and launching new cars is the key to increasing the competitiveness of car companies. If the new car launches are affected, it will also make the older models face tougher competition, and even lose some market share.

Finally, the outbreak will also mean a decline in income and benefits for car company employees.

The engineers mentioned above told Car Stuff that after the end of the epidemic, their performance pay will probably decline or even be canceled, affecting their income. At the same time, in order to catch up with the R&D progress, its R&D center is also the probability will increase overtime.

Four, thousands of parts and components companies affected? Has led to the suspension of overseas car companies

Wuhan, in addition to a large number of vehicle factories, there are a large number of supporting parts suppliers. According to statistics, in 2018, there are more than 1,100 auto parts enterprises in Wuhan***, accounting for about 6% of the country. Among the 1,100 parts enterprises, there are 16 of the world's top 500.In 2018, the total output value of Wuhan's auto parts industry exceeded RMB 50 billion.

Currently, large global parts suppliers Bosch, Webasto and Valeo have factories or R&D centers in Wuhan.

1. Bosch

Currently, Bosch has 23 manufacturing plants*** in mainland China, mainly making motors, gearboxes and electrical equipment for electric vehicles and exporting them to other countries. The two plants in Wuhan mainly manufacture automotive steering systems and thermotechnology components. Bosch also has manufacturing plants in the cities of Wuhu, Nanjing, Changzhou, Wuxi and Taicang.

▲Bosch's headquarters in Shanghai

In 2019, Bosch's sales in the Asia-Pacific region totaled 22.5 billion euros, including 10 billion euros in China.

Bosch CEO Volkmar?Denner said, "The two plants in Wuhan have about 800 employees. At the moment, no employees have been infected with the new coronavirus." He noted that the impact on Bosch's global business was small because the shutdown date fell during China's Lunar New Year holiday.

However, he did warn that if the shutdown continued into March, it would have a more pronounced impact on Bosch's international business.

2. Webasto

German supplier Webasto's largest production base in the world is located in the city of Wuhan. Currently, Webasto's Wuhan plant manufactures electric sunroofs, electric heating systems and charging stations for electric vehicles.

It is understood that after expanding last year, the Wuhan plant is now capable of producing 2 million sunroof systems, 1.2 million electric heating systems and 600,000 charging posts per year.

▲In September 2019, German Chancellor Angela Merkel attended the opening ceremony of the new Webasto Wuhan plant

However, Webasto is currently experiencing a more serious situation, with seven employees in the Wuhan Webasto plant diagnosed with a new coronavirus. Webasto's headquarters in Germany is currently closed and is expected to reopen on Feb. 11th.

Holger?Engelmann, chief executive of Webasto, said the company's more than 1,000 employees will work from home for nine days.

Previously, Webasto said that five of the seven employees infected with the new coronavirus were German and two Chinese, and that all seven had attended meetings at Webasto's headquarters and may have had close contact with other employees.

3. Valeo

Supplier Valeo also has a research and development center in Wuhan. China is currently Valeo's biggest market, with sales accounting for about a quarter of the total.

Valeo's R&D center in Wuhan is also currently out of commission. This R & D center is mainly for the comfortable automatic assisted driving system, automotive headlights, millimeter wave radar, 4G/5G communication vehicle module technology research and development, as well as the layout of the next generation of intelligent network, new energy vehicles related industry chain.

It is understood that in 2019, Valeo invested 55 million yuan to expand on top of the original R&D center and also recruited more than 1,000 top researchers.

4. Other Enterprises

Of the more than 1,100 parts and components enterprises in Wuhan, private enterprises account for more than half, and 80% of the auto parts enterprises have no more than 500 employees.

Thus, auto parts enterprises in Wuhan are mainly private small enterprises. And these enterprises in the spreading epidemic today, the survival of the situation is even more worrying.

The automobile industry is a long chain of industries, if the parts and components companies can not resume work, even if the car companies resume work can not continue to produce, can be said to be a glory, a loss.

The current news, in Wuhan and Hubei, the parts and components enterprises in the resumption of work time and the car company's resumption of work time is afraid of a time gap, the entire automotive industry in Hubei, I am afraid that after the resumption of work, I am afraid that it will take a certain amount of time in order to return to normal operation.

At the same time, due to Hubei, some parts and components enterprises also exported parts to overseas, so it also led to some foreign car companies appear to work stoppage, such as located in South Korea's Hyundai, Kia Motors, Renault Samsung plant has been shut down, is located in Kyushu, Japan's Nissan Kyushu plant will be shut down on Friday.

Conclusion: Pneumonia outbreak may make traditional car companies worse

The pneumonia outbreak caused by the new coronavirus is still evolving, and the number of new cases per day has declined, with more and more patients being cured. But the impact of the outbreak has already touched nerves around the world.

After the outbreak is largely under control, major automakers will resume production as soon as possible.

A Dongfeng Group engineer told Car Stuff that his company has already taken measures to ensure that some of the work in the enterprise is carried out.

1. At the end of the Spring Festival holiday, the online office was started, and most of the work done in cooperation can be exchanged through e-mail.

2. After the enterprise resumed work, production was stepped up by reducing one rest day per week.

3. Other measures are possible if the company is not in good shape.

Dongfeng Group is one of the largest automakers in the Wuhan area, and the impact of the shutdown has been huge. Similarly, there are smaller car companies in Wuhan that will have a tougher time. In the future, the automobile manufacturing industry may have to live a "hard life".

In recent years, the lack of competitiveness of traditional car companies is gradually becoming apparent due to profound changes in the automotive industry. Coupled with the impact of the epidemic, Wuhan, one of the core regions of China's auto industry, will also suffer a heavy blow. Traditional car companies, which are already experiencing a decline in competitiveness and profit margins, may face an even more severe situation. For car companies in Hubei province, which is the hardest-hit area of the epidemic, this will undoubtedly add to the woes.

This article comes from the authors of the Motor Home Car Family, and does not represent the viewpoint position of the Motor Home.