Shanghai production plummeted in April after the Covid blockade

Although Shanghai began in mid-April prioritizing several hundred companies for resumption of work, foreign business organizations have said that this does not mean that factories can operate at full capacity.

Tian Yuhao | News services in China | Getty Images

BEIJING – Car production plummeted in April when the Covid blockade shut down nearly all non-essential activities in the metropolis of Shanghai, according to a report by the China Passenger Car Association.

Five major Shanghai automakers saw production plummet by 75 percent in April compared to March, the association said in a report Tuesday. Production in the joint ventures of major foreign automakers in the northern city of Changchun, also temporarily blocked to control Covid, fell by 54% during that period, the report said.

Nationally, China’s passenger car production also slumped in April, down 41.1% year-on-year and 46.8% from the previous month, the report said.

The automotive sector in China accounts for about one sixth of jobs and about 10% of retail sales, according to official data for 2018 drawn up by the Ministry of Commerce.

According to Citi, Shanghai is headquarters of many car manufacturers: SAIC Motor, a joint venture of SAIC with Volkswagen e GM, no, Tesla Other ford.

Shanghai began to shut down in earnest at the end of March.

Although the city began prioritizing several hundred businesses for resuming work in mid-April, foreign business organizations said that it does not mean that factories can operate at full capacity. Suppliers may also remain closed or unable to transport parts.

TeslaThe Shanghai Gigafactory, which reopened with much fanfare about three weeks ago, remains subject to the continuing uncertainty of Covid.

This week, the company had to cut production in Shanghai due to Covid-related issues, according to JL Warren Capital CEO and Research Director Junheng Li. A supplier had to temporarily close due to Covid, limiting the availability of parts for Tesla’s Model Y.

Tesla did not respond to a request for comment.

– CNBC’s Lora Kolodny contributed to this report.

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