Covid-19 closures: FAW shuts Jilin factory for brands from Audi to Toyota and Volkswagen as Omicron flares up in northeastern China

FAW manufactures foreign marques as well as Red Flag limousines and initially halted production between March 13 and 16 to help Changchun contain Covid-19 outbreak

All eyes on how soon carmaker can have assembly lines up and running again, analyst says

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FAW’s Red Flag limousines are inspected at its assembly line in Changchun, in this file photo from April 2019. Photo: Xinhua

Published: 8:07pm, 18 Mar 2022Updated: 2:25pm, 19 Mar 2022

FAW Group, China’s oldest carmaker and once a symbol of the Communist Party’s manufacturing might, has not yet fixed a date for the resumption of production at its five assembly lines in Changchun, in China’s northeastern Jilin province.

FAW, which produces a range of marques, from Volkswagen and Toyota to China’s iconic Red Flag limousines, initially halted production between March 13 and 16 to help the city contain an Omicron variant-fuelled outbreak of Covid-19. But the severity of the outbreak stopped it from restarting production on Thursday, March 17.

And it has not yet fixed a date for the restart, said two sources with knowledge of the matter.

“Given its role in the local economy and its leading position in the mainland’s automotive market, FAW’s production suspension could have an impact on the country’s car making industry,” said Ivan Li, a fund manager with Shanghai-based Loyal Wealth Management. “All eyes will be on how soon those assembly lines can start working again.”

An Audi is assembled at the FAW-Volkswagen factory in Changchun in this file photo from July 2019. Photo: Xinhua

The closure at FAW has increased the pressure on Jilin’s economy – it employs 150,000 workers at its assembly lines in Changchun. An internal document by the city’s industry regulator showed that the total number of workers affected by the shutdown topped 280,000. This number included workers involved in the supply chain feeding FAW.

All of the carmaker’s production facilities remain shut and its workers are staying home amid the city’s efforts to contain the outbreak. There are concerns that the assembly lines could add fuel to Changchun’s outbreak, which has kept local and company officials from making a decision, a FAW source said.