GM and Honda team up to build cheap electric cars 1:11
(CNN Business) --
Factories are closing, new model launches are delayed and sales are plummeting.
China's huge car market has been hit by the latest spike in Covid-19 cases in the country, with strict lockdowns in several cities affecting vehicle production.
China's worst coronavirus outbreak in two years has prompted authorities to escalate the government's "zero covid" policy, shutting down several major cities and tens of millions of people.
Strict lockdown measures in places like Shanghai and Jilin province have forced automakers to shut down manufacturing and risk delaying shipments at a time when global demand for vehicles is strong.
Volkswagen factories in Shanghai and Changchun, the provincial capital of Jilin, have been closed for weeks, the company said on Monday.
"Due to the current COVID situation, production at our factories in Changchun (from mid-March) and Anting/Shanghai (from April 1) is currently suspended," Volkswagen said in a written response to CNN Business.
"This is currently causing a delay in production."
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New coronavirus shutdowns are still hitting factories in China
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The company added that it will compensate for production stoppages “if the situation improves in the near future”, through additional shifts and other measures.
"Right now, we are evaluating the situation day by day," he added.
Tesla has halted production at its Shanghai factory since the city imposed a lockdown on March 28, and Toyota has also been forced to close its Changchun factory, according to Reuters.
Neither company responded to CNN Business requests for comment.
Nio, a Chinese electric vehicle maker, said on Saturday that it had suspended production due to disruptions related to Covid-19.
"Since March, due to the pandemic, the company's supplier partners in various places including Jilin, Shanghai and Jiangsu have suspended production one after another and have yet to recover," the company said in a statement.
"Consequently, Nio has stopped car production," he said, adding that the company will postpone deliveries of its electric vehicles to users.
It's not just about individual manufacturers.
The Beijing Auto Show, one of the largest global gatherings in the industry, has been postponed until further notice due to the recent spike in covid-19 cases.
The event was originally scheduled to take place from April 21 to 30.
"We will pay close attention to the development of the pandemic," the China Auto Secretariat said in a post on its official WeChat account on Saturday, adding that it would announce new dates in due course.
That means several new car launches will be delayed.
Chinese electric vehicle makers Nio, XPeng and Li Auto earlier said they would unveil new models at the Beijing auto show.
Employees check in an inspection line during a media tour of Nio Inc.'s production facility in Hefei, Anhui province, China, on Friday, Dec. 4, 2020. (Qilai Shen/Bloomberg)
car sales fall
The covid-19 restrictions have also taken a toll on the country's car sales.
Vehicle sales in China fell 12% in March from a year earlier, reversing a 19% rise in February and ending two consecutive months of growth, data from the China Association of Automobile Manufacturers showed on Monday.
The organization attributed the decrease to the recent increase in Covid-19 cases.
However, Monday's data showed a bright spot: demand for electric vehicles in China remains strong.
Some 455,000 new-energy vehicles, including hybrids and pure electric vehicles, were sold in March, up 122 percent from a year ago, according to separate data from the China Passenger Car Association.
Tesla's sales in China were particularly strong, ranking first among pure electric brands.
The company delivered 65,814 Chinese-made vehicles in March, most of which were sold in the Chinese market.
That number is up 85% from a year ago.
BYD, meanwhile, sold the most new energy vehicles in China, delivering 104,878 units in March.
Among them, 53,664 were purely electric models.
Tesla did not immediately respond to a request for comment on its March sales figures.
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