Grim Production Forecasts from China’s COVID-19 Lockdown

By: SiliconExpert on May 23rd, 2022

May 23, 2022 – After more than 6 weeks of strict lockdowns, China’s drop in industrial production and retail sales is far worse than what analysts have predicted. 

 

Worst Economic Fallout Since February 2020 

The economic contraction is the worst felt in China since February 2020. The sales of consumer goods fell 11.1% since last year. Manufacturing dropped by 4.6%. And automobile sales plunged 31.6%. 

China’s Zero-COVID policy has forced thousands of workers home and suspended operations at major manufacturing hubs across the country, putting even greater woes onto a global supply chain struggling to keep with an already precarious situation. With factories shutdown and production halted, most manufacturing operations in China are at a standstill. 

 

List of Major Manufacturers Impacted by Lockdown 

In our previous blog on the situation, we provided a list of some of the impacted businesses, however, since that time, the situation has gotten worse due to the continued lockdowns.  

We have compiled a list of some of the major manufacturers that have been impacted by the shutdowns. 

ManufacturersLockdown Impact
Toyota Motor Corp. Lowered May production plan to 700,000 vehicles from 750,000 due to lockdown impact.
Tesla Inc. The Shanghai plant closed down for three weeks in April. The factory, which typically ships around 60,000 cars a month, delivered only 1,512 vehicles last month
Volkswagen AG Production is still at low levels as of early May. China’s overall market recorded a decline in the first quarter, with deliveries falling by 24%
Ford Motor Co. Loss in China widened by $38 million in the quarter, wholesales decreased 15%, and revenue fell 32%
Honda Motor Co. One of the company’s domestic production lines stopped operation due to the Shanghai lockdown, expecting to see impacts from restrictions continue through the end of May
TE Connectivity Ltd Factories in China aren’t operating at full production, and have encountered problems delivering products to customers
General Electric Co. Hit both from demand and output perspectives last quarter, particularly by Shanghai lockdown
MinebeaMitsumi Inc. Shanghai factory production was particularly impacted in April and May.
Aptiv Plc Had production interruptions that adversely affected sales and profitability.
Parker-Hannifin Corp. Had some facilities fully shut down in China, resulting in an estimated $100 million impact on sales in the June quarter.
Nidec Corp. Sales of small precision motors declined sharply, with estimated lost revenue of about $47 million
How Can SiliconExpert Help?  

Digitizing your supply chain can help you get priority notifications on events that may impact your bill of materials. SiliconExpert’s Supply Chain Module closely monitors situations that have the potential to impact the global economy and provides you with crosses/alternatives to keep your supply chain intact. 

We at SiliconExpert are continuing to closely monitoring China’s COVID-19 lockdowns and other COVID-19 related supply chain events to help you identify potential risks to your supply chain. 

Learn more about how SiliconExpert’s Supply Chain module can help keep your business on track!   

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