China slowly returns to flying and driving as normal

While much of the world’s output is grinding to a halt because of the coronavirus, China is slowly emerging from its shutdowns by restarting production at factories and resuming some flights.

A recovery in the world’s second-largest economy provides some relief for global manufacturers in the months ahead as the outbreak continues to wreak havoc in Europe, US, India and Latin America.

Employees are returning to work, production lines are starting to roll and even the original outbreak epicentre of Wuhan is ending its lockdown soon. Car sales in China probably hit a bottom in February and are set to gradually rebound as the spread of the virus slows and consumers return to shopping, a car industry group said in February.

“Real-time indicators show that China is restarting its industrial complex,” analysts at Sanford C Bernstein said in a note Tuesday. “Clearly the restart is at an early stage, but things are gradually improving.”

At the nation’s airline industry, whose slump in February decimated its huge aviation market to a size smaller than Portugal’s, carriers are slowly restoring flights. Scheduled capacity rose 2.4% last week from the previous seven days to 9.2-million seats, while all the other top 10 markets in the world continued to decline, according to flight-data analytics firm OAG Aviation Worldwide.

Other signs include Chinese subway traffic increasing 21% last week, and online sales of large appliances rebounding in both volume and average prices on a week-to-week basis, according to Bernstein.

Much of China was closed for weeks starting in late January after the outbreak extended a Lunar New Year holiday break. Here is where some carmakers in China are now with their ramp-ups:

Honda

The Japanese company said capacity is gradually recovering at its two Chinese ventures and so far they have not had problems caused by parts shortage due to strain in supply from outside China.

Nissan

All Nissan Motor factories in China have resumed work and production is set to align with government mandates, the company said.

SAIC

All SAIC Motor plants in China have resumed production, with the company adjusting output levels based on demand. The carmaker has contingency plans to secure parts in case of any disruptions, it said.

Tesla

Tesla’s factory in China has recovered from a virus-related shutdown better than many in the industry, helped by aid from local authorities. After resuming operations on February 10, the plant — Tesla’s only outside the US — has surpassed the capacity it had before the shutdown, reaching a weekly production of 3,000 cars, a company representative said on Friday.

Toyota

The Japanese car giant’s plants in Guangzhou and Changchun have returned to their regular two-shift schedule, while in Tianjin, all production lines are back to two-shift arrangements except one that remains at one shift. The Chengdu plant is sticking to its usual one shift. More than 98% of Toyota’s dealerships are open again, and the company has no plans as of now to adjust its 2020 China sales target, it said.

Volkswagen

Almost all production sites are back to operational, Volkswagen said. Challenges include a slow national supply chain and logistics ramp-up, as well as limited travel options for employees. All of Volkswagen and its partners’ component production sites are producing again, it said. The company is adjusting its output levels based on current conditions, like moving to one shift instead of two previously, according to the German company.

Bloomberg