Chinese Plants Restart Operations as Rest of World Hits the Brakes

RIO DE JANEIRO, BRAZIL – People are back to work, production lines start operating and even Wuhan, the original epicenter of the outbreak, will soon end the lockdown.

While much of the world’s production is halted due to the coronavirus, China is slowly restarting plant operations and a number of flights.

The rebound of the world’s second largest economy may provide some relief for global manufacturers in the coming months, as the outbreak continues to do damage in Europe, the United States, India and Latin America.

People are back to work, production lines start operating and even Wuhan, the original epicenter of the outbreak, will soon end the lockdown. Car sales in China should have hit one level last month and gradually start to rebound as the virus is contained and consumers begin buying, an automotive industry association said this month.

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

Data released on Wednesday showed that car sales in China, the world’s largest market, increased in the weekly comparison since early February.

While last week’s sales still show a 40 percent decline from the previous year, the figure is compared to last month’s low of 96 percent, according to data from the China Passenger Car Association.

In the aviation market, which shrank to the point of falling behind Portugal in size due to the crisis last month, airlines are slowly resuming flights.

Scheduled capacity increased 2.4 percent last week to 9.2 million seats, while all 10 other major markets in the world continued to decline, according to flight data analysis firm OAG Aviation Worldwide.

Other indicators include Chinese subway traffic, up 21 percent last week, and rebounding online sales of large appliances in both volume and average prices in the weekly comparison, according to Bernstein.

Much of China has been closed for several weeks since late January after the government extended the Lunar New Year holiday as a result of the outbreak.

Some examples of the restart of operations in China follow:

Fiat Chrysler

The company said that plants in China have restarted production under the approval of relevant regional and national governments. More than 90 percent of the dealerships and 95 percent of the joint venture team with Guangzhou Automobile have returned to work and “general manufacturing and commercial operations are gradually returning to business,” Fiat Chrysler said.

Foxconn

Foxconn, a major manufacturing partner of global companies such as Apple and HP, is showing steady recovery. Hon Hai Precision, a Foxconn facility, said this week that all seasonal employees have returned to work earlier than expected, an indication that the Taiwanese company is confident in addressing the shortage of manpower and logistical bottlenecks that threaten to slow the flow of iPhones and devices to the US and the rest of the world.

Tesla

The Tesla plant in China has bounced back from a virus-related shutdown better than many in the industry, due to the help of local authorities. After restarting operations on February 10th, the plant – Tesla’s only one outside the US – exceeded capacity before the shutdown, reaching weekly production of 3,000 cars, a company representative said on Friday.