Coronavirus as we know it to be ravaging China is forcing auto makers to shut their doors. China is currently working round the clock to contain the deadly virus. Hyundai has joined the car makers that have shut down its three plants in South Korea. This is said to be due to wiring harnesses that was no more coming in from the supplier in China.
Kia is said not to be affected. Hyundai’s Ulsan plant being the largest in the world with an annual capacity of 1.6 million vehicles has also been shut down. The new Hyundai Palisades is already affected by this development.
BMW, Daimler, Ford, Honda, Nissan, Renault, Tesla, Toyota and the Volkswagen Group have all suspended production in China in the last week. Part suppliers like Bosch are also following suit. The shutdown is however not voluntary. A policy makes every foreign automaker or part supplier establish a 50/50 joint venture with a Chinese company (if they are to do business in China) who are mostly state sponsored or seriously attached to the Chinese government.
Some provinces have been said to extend the Chinese New Year Holiday to February 9 instead of the normal January 29 because of this situation. Bloomberg has also noted that a necessary market correction may result from the shutdown – an oversupply of China-built cars will be put under check. If the shutdown lasts for several more weeks, automakers may lose heavily. Several automakers also rely on China for parts which may also cut short production numbers.