COVID-19 outbreak: IHS Markit expects supply chain issues to improve in China from end March

Automotive suppliers in China are gradually resuming production but face challenges in increasing their capacity

Extended closures of automotive suppliers’ facilities in China, which have taken place since the Lunar New Year annual holidays in the second half of January to prevent the spread of the novel coronavirus disease (COVID-19), have severely affected the global supply chain. Some city and provincial governments in China implemented a complete ban on nonessential business activities and restriction on the movement of people and goods in the first half of February. The production suspensions in Wuhan (Hubei province), the epicenter of the COVID-19 outbreak and a powerhouse of auto parts and electronics manufacturing, pose a serious risk with regards to the vehicle production schedules of automakers in China and overseas. Although Hubei still remains on a lockdown, automakers and suppliers are gradually restarting production operations at other Chinese regions. Restrictions on manufacturing operations will continue in Wuhan and in other parts of Hubei province at least until 11 March, unless authorities decide on a further extension.