All vehicle manufacturers and parts suppliers resume production.
Shanghai Automotive Industry Press the restart button.
On April 19, Tesla Shanghai Super factory, which had been shut down for 23 days, resumed production. It is said that in the previous two days, more than 8000 employees of Tesla have successively returned to the factory.
Tesla factory is the largest foreign-funded manufacturing project in Shanghai. According to the data, the factory delivered 484000 vehicles in 2021, accounting for 51.7% of Tesla‘s total global delivery, which has reached the previously planned capacity.
However, due to epidemic prevention and control, the factory has stopped production twice recently. On March 16 and March 17, Tesla stopped production for two consecutive days. From March 28, with the start of regional sealing control, Tesla also suspended the production activities of the factory.
At present, the epidemic prevention work is still in progress, and the sealing and control has not been cancelled in Shanghai, but some industrial enterprises have taken the lead in returning to work and production in an orderly manner.
On April 16, the Shanghai Municipal Economic and Information Technology Commission issued the guidelines for the prevention and control of the epidemic situation of resumption of work and production of industrial enterprises in Shanghai (the first edition), which requires that on the premise of ensuring that the risk is controllable, we should vigorously, orderly and effectively promote the resumption of work and production of enterprises and ensure the safety and stability of the supply chain of the industrial chain. On the same day, the “white list” of the first batch of 666 key enterprises was released, “Tesla (Shanghai) Co., Ltd.” was among them, and was marked as “discontinued enterprises that must return to work”.
The automobile industry is an important pillar of Shanghai’s economy. Among the first 666 enterprises to resume work and production, more than 250 automobile related companies, accounting for nearly 40%, including many vehicle factories under Saic Motor Corporation Limited(600104) banner, such as Lingang passenger car factory, SAIC Volkswagen, SAIC GM, and a series of parts suppliers, such as United electronics, ZF, Valeo, etc.
According to the reporter of 21st Century Business Herald, at present, the vehicle factory under Saic Motor Corporation Limited(600104) has completed the pressure test of returning to work and production. On April 19, the first vehicle under the pressure test of SAIC Lingang factory went offline
Driven by the production demand of the vehicle factory, many upstream parts suppliers have also resumed production Bosch, mainland China and other large suppliers told reporters that their factories in Shanghai are implementing “closed-loop” production to meet customer needs
However, it is not easy to resume the work of epidemic prevention at the same time. According to the feedback from many enterprises, due to factors such as poor supply chain and insufficient personnel, the current resumption of work and production has just begun, and the production capacity of each factory is temporarily difficult to quickly recover to the previous level. Obviously, more efforts are needed to restart the automobile industry.
All vehicle manufacturers and parts suppliers resume production
Shanghai is an important base of China’s automobile industry. According to the data, in 2021, the total output of automobiles in Shanghai was 2.832 million, accounting for 10.7% of the country. It is not only home to a number of complete vehicle factories such as SAIC and Tesla, but also a large number of automobile parts suppliers from outside China. While fighting the epidemic, it is urgent to restart automobile production.
After the release of the list of the first batch of 666 enterprises that have resumed work and production, a number of automobile industry chain enterprises have announced the resumption of production this week. Tesla also finally confirmed that the Shanghai factory had resumed production on the 19th. Earlier that day, the supporting battery and motor workshop took the lead in resuming production.
Saic Motor Corporation Limited(600104) has started the pressure test of resumption of work and production, and its production enterprises, including SAIC passenger car, SAIC Volkswagen and SAIC GM, are making final preparations for resumption of work and production. A person close to SAIC had previously told the 21st Century Business Herald that “enterprises with successful stress tests will arrange formal resumption of production as soon as possible.”
Among them, the first car under the pressure test of SAIC Lingang passenger car factory has been offline. It is understood that 4000 employees are in the closed-loop management of the factory and maintaining the production operation.
“The staff of the port factory have done more than 10 rounds of nucleic acid testing, and they have reduced unnecessary flow in the work area to ensure safe production. In order to stabilize the subsequent resumption of work and production, Saic Motor Corporation Limited(600104) arranged nearly 400 suppliers, and comprehensively investigated the production capacity, inventory and raw materials of suppliers.” A Saic Motor Corporation Limited(600104) insider said.
The resumption of work and production of the whole vehicle factory also drives the resumption of work and production of parts suppliers. Take Saic Motor Corporation Limited(600104) as an example, in addition to its vehicle manufacturers, Huayu Automotive Systems Company Limited(600741) and other parts suppliers have recently conducted the pressure test for resumption of work and production Yanfeng, a subsidiary of Huayu Automotive Systems Company Limited(600741) company, ranks 17th in the global top 100 auto parts list. This time, as many as seven companies under Huayu are on the “white list” of the first batch of resumption of work and production.
In addition, United Automotive Electronics, a joint venture established by Bosch, a large auto parts supplier, and Saic Motor Corporation Limited(600104) is also on the “white list”. Bosch officials told the 21st Century Business Herald that Bosch’s auto parts production base in Shanghai is producing through “closed-loop management”.
Song Gang, senior director of production and manufacturing of Tesla super factory, also said in an interview that in synchronization with Tesla’s resumption of work, many Tesla parts suppliers in Shanghai also began to resume work. According to the “white list”, the branches of Ningbo Joyson Electronic Corp(600699) , Contemporary Amperex Technology Co.Limited(300750) and other enterprises in Shanghai are listed in the list of resumption of work and production.
On April 20, a relevant person from continental group, a large parts supplier, told the 21st Century Business Herald reporter that the mainland tamic Shanghai factory is strictly implementing the government’s anti epidemic policy in closed-loop production. At present, the factory’s production, technology, quality and other management backbone and some production front-line employees take the initiative to stay in the factory, eat and live in the company, so as to ensure the normal promotion of business.
it should be pointed out that many automobile industry chain factories have been in closed-loop production before, such as SAIC passenger car port factory, mainland tamic factory, etc. Bosch related people also told reporters that the company’s factory in Shanghai had been under “closed” management
The 21st Century Business Herald reporter learned that due to the prediction of the epidemic prevention situation, SAIC passenger car port factory had about 3000 employees in “closed” production. From the beginning of semi closed to full closed, the whole state has lasted for about a month. After the policy of returning to work and production came down, the number of people on duty increased.
Limited output scale
Production has been restarted, but it is unrealistic to return to the previous output level immediately.
According to Song Gang, Tesla will gradually ramp up its production capacity in the next three or four days to full production in a single shift as a whole. It is said that under normal circumstances, Tesla’s Shanghai plant is produced in a “two shift system”. Even if a single shift is in full production, the output per day is only about 1000 vehicles, and the annual output is 365000 vehicles – obviously less than the planned annual capacity of 500000 vehicles.
SAIC passenger cars are facing a similar situation.
The relevant person in charge of Saic Motor Corporation Limited(600104) port base said: “from Tuesday (April 19), the factory will adopt a single shift system. If the supply chain can remain stable, we also hope to gradually climb the slope and return to the pre epidemic shift system as soon as possible.” It is reported that under the condition of smooth material guarantee, the factory also operates at full capacity in two shifts.
It is not easy to resume work and production under the background of anti epidemic. On the one hand, it is difficult for all personnel to be in place, which will more or less affect the rhythm of production. On the other hand, the situation of the upstream supply chain is also restricting the further production capacity. Although Tesla will reach full production in a single shift within this week, this is based on the fact that its parts inventory can meet one week’s production.
at present, many Tesla parts suppliers in Shanghai have begun to resume work, but the supply of other suppliers in the Yangtze River delta needs to be further promoted it is said that Tesla suppliers located in Zhejiang Province also actively linked and ensured production under the guidance of the government, opened up logistics and supported Tesla vehicle manufacturing; At present, many suppliers in Jiangsu Province are still in the state of shutdown, and the transportation is difficult. At present, the relevant departments of the Ministry of industry and information technology, Jiangsu Province and Suzhou are also actively coordinating the restoration of the supply chain.
The relevant person in charge of Saic Motor Corporation Limited(600104) port base also said, “the resumption of work and production still faces many challenges and uncertainties, such as whether the supply chain is stable or not. The production rhythm will be adjusted in strict accordance with the government’s epidemic prevention policies.” Saic Motor Corporation Limited(600104) said that it was connecting with relevant government departments and striving to open up a green channel across provinces and cities as soon as possible.
Bosch related people told the 21st Century Business Herald that at present, they are still facing the temporary impact of logistics and supply chain procurement, and the output is difficult to reach the previous level. Executives from foreign parts suppliers also told the 21st Century Business Herald that their upstream suppliers have stopped production and the finished products cannot be transported, which also affects their supply.
the normal operation of automobile industry depends on the joint efforts of upstream and downstream industrial chains. From the feedback of automobile enterprises, it is not difficult to see that the difficulties of the current automobile supply chain mainly include the shutdown of suppliers and poor logistics. The automobile industry chain is relatively long, the upstream and downstream are linked, and one is blocked, which may require dynamic adjustment of the whole chain
