Covid lockdowns are causing chaos in the world’s largest car market

The strict lockdown measures in places like Shanghai and Jilin province have forced car manufacturers to stop manufacturing and risk delayed shipments at a time when global demand for cars is strong.

of Volkswagen ,VLKPF, factories in Shanghai and Changchun, Jilin’s provincial capital, have been closed for weeks, the company said on Monday.

“Due to the current Covid situation, production at our factories in Changchun (since mid-March) and Anting / Shanghai (since April 1) is currently at a standstill,” Volkswagen said in a written response to CNN Business. “This is currently causing delays in production.”

The company added that it will compensate for the production stoppages “if the situation worsens in the very near future,” by additional shifts and other measures. “At the moment we are assessing the situation from day to day,” it added.

Employees make checks at an inspection line during a media tour of the Nio Inc.  production facility in Hefei, Anhui Province, China, on Friday, Dec.  4, 2020.
Nio ,NIO,a Chinese manufacturer of electric cars, also said Saturday that it had stopped production due to Covid-related disruptions.

“Since March, due to the pandemic, the supplier partners of the company in several places, including Jilin, Shanghai and Jiangsu, have stopped production one after the other and still need to recover,” the company said in a statement. “As a result, Nio has stopped car production,” it said, adding that the company will delay deliveries of its EVs to users.

It is not just individual manufacturers. The Beijing Motor Show, one of the industry’s largest global meetings, has been postponed until further notice due to the recent increase in Covid cases. The event was originally scheduled to take place from April 21 to April 30.

“We will pay close attention to the development of the pandemic,” the Secretariat of Auto China said in a post on its official WeChat account on Saturday, adding that it will announce new dates in a timely manner.

Tesla will not be able to restart Shanghai production on Monday

That means several launches of new cars will be delayed. Chinese EV makers Nio, XPeng and Li Auto have previously said they will unveil new models at the Beijing Motor Show.

The Covid restrictions have also taken a toll on the country’s car sales.

Car sales in China fell 12% year-on-year in March, reversing a 19% increase in February and ending two consecutive months of growth, data from the China Association of Automobile Manufacturers showed up Monday.

The association attributed the decline to the recent increase in Covid cases.

The pandemic has been great for selling electric cars
However, Monday’s data showed a bright spot – China’s demand for electric cars remains strong.

About 455,000 new energy cars, including hybrids and pure EVs, were sold in March, 122% up from a year ago, according to separate data from the China Passenger Car Association.

Tesla ,TSLA,China’s sales were particularly strong, ranking first among pure-electric markets.

The company delivered 65,814 cars made in China in March, with the majority of those sold in the Chinese market. That number was 85% higher than a year ago.

BYD ,BYDDF,, meanwhile, sold the most new energy cars in China, delivering 104,878 units in March. Among them were 53,664 pure-electric models.

Tesla did not immediately respond to a request for comment on its March sales numbers.

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