(Yicai Global) Feb. 24 -- SAIC Motor's subsidiaries have begun returning to work where they can, but the automaker's joint venture plant in Wuhan, the Chinese city at the epicenter of the novel coronavirus epidemic, may need more time.
Two factories of SAIC Volkswagen Automotive in Yizheng, Jiangsu province and in Shanghai's Jiading district were due to restart today, Yicai Global learned from insiders at SAIC Motor. SAIC Maxus Automotive has gradually resumed production at two plants in Nanjing and Wuxi, both in Jiangsu. Joint venture SAIC-General Motors and the production base for SAIC's passenger cars will also get back to work this week.
Shanghai-based SAIC Motor had postponed its scheduled restart date beyond the extended Chinese New Year holiday. The Wuhan plant is one of SAIC-GM's four major production bases in the country.
"Resumption at the Wuhan plant will be delayed further," another company insider told Yicai Global. "The epidemic's impact on the firm will be small if it ends soon. If not, the impact will be huge."
The Wuhan complex has an original equipment manufacturer plant, with an annual production capacity of 400,000 units or 20 percent of the firm's total, as well as an engine factory.
SAIC-GM Wuling Automobile, another joint venture between SAIC and General Motors, resumed manufacture on Feb. 17. As the number of returning employees slowly picks up, output has been climbing. Its daily production capacity is close to 300 vehicles, including nearly 100 overseas models.
SAIC-GM Wuling began turning out masks in cooperation with upstream suppliers earlier this month to overcome the shortage of protective supplies for workers and resume production as soon as possible.
A Mask a Day
"We have prepared an epidemic prevention plan according to government requirements," said an insider at SAIC Maxus. "Employees back at work must obtain government approval [on their immunization status] and check their temperatures before entering the workshop. The company provides each employee with a mask each day."
Though the firm has gradually resumed work, the return rate will be affected by the number of returning employees and parts supply, insiders said. Most automakers' spare parts inventories are relatively depleted. If a spare part is in short supply or out of stock, it will affect production.
With the domestic consumption effectively blocked, SAIC Motor is paying more attention to guaranteeing the delivery of overseas orders.
"The schedule of roll-on roll-off ships is usually once a month," the head of SAIC International told Yicai Global. "If you miss the schedule, you must wait another month before shipping."
Fortunately, SAIC Motor was aware of possible risks facing the supply chain at the beginning of the virus outbreak, so it coordinated with plants, logistics companies, governments, and customers in advance, and came up with a feasible response plan.
"Export logistics are running well," a SAIC MG insider told Yicai Global. "We've done a good job of reserving products in advance for the Spring Festival [Chinese New Year holiday], so overseas exports have not been affected."
This month, SAIC Motor had shipped more than 5,000 MG brand vehicles to Saudi Arabia, Egypt, Europe and South America as of last weekend. It will also have products delivered to Australia, the Philippines and Europe, according to the plan, the insider said.
Editors: Tang Shihua, Peter Thomas