Automakers and suppliers of the global automotive industry revealed their quarterly earnings projection results for the rest of 2020. It was also announced that supply and production would resume by February, some factories in China opening sooner than the others.
Supply-chain disruptions have been occurring after many factories making automotive parts and the suppliers of the industry declared a standstill in its production due to the Lunar New Year holiday.
Safety and electrification systems creator Aptiv along with Volkswagen Group and General Motors have also revealed their quarterly earnings projection results last Thursday. The numbers showed that the automotive market is currently fluid.
According to the Aptiv CFO Joseph Massaro, companies experienced dislocation of labor due to workers fleeing China for the Lunar New Year. It was also hinted that the said workers might not resume their posts until the coronavirus epidemic is contained. Thus, Massaro claimed that the values that showed slowing profits were made from a practical or government-mandated perspective.
The biggest foreign automaker in China Volkswagen also asked 3,500 of its factory workers to work from home for two weeks from the start of the Lunar New Year holiday. The said mandate would be effective from February 3 until February 17, 2020, for some of its factories.
Last Thursday, Volkswagen assured the market that it would continue operations on its joint venture with FAW Group but, instead of the generally imposed two-week standstill, tit would resume outputs before February 9, 2020. Its Shanghai plants with SAIC Motor would also be reopening by February 10, 2020.
Despite the supply-chain disruptions, planned deliveries to customers in the automotive industry persist, Volkswagen announced. Furthermore, the Czech Foreign Ministry also announced last Wednesday that there would be no travel ban but people coming into China may only be granted transportation access when it is absolutely necessary. Thus, other their citizens working in the automotive industry are expected to resume their posts once operations resume.
Consequently, Tesla Inc. would also be suspending factory productions for one and a half weeks in creating its flagship Model 3 vehicle. It was recently launched in Shanghai, said the company's CFO Zach Kirkhorn.
The biggest maker of computer graphic chips and key auto supplier Nvidia also announced that its workers in China were also mandated to stay home in the meantime. Magna International, on the other hand, assured the market that it is observing several precautions such as lengthening plant closures in China-based facilities.
According to Magna spokeswoman Tracy Fuerst, the company is currently issuing employee health screenings and is complying with work hygiene measures in its China plants. It has not declared a standstill on its operations and would also continue the supply and production of automotive products by February.
