Coronavirus: China’s car part makers face collapsing orders, as factories around the world kill their engines

As companies from Ford to Toyota to Volkswagen shut their global plants amid coronavirus outbreak, the impact resonates in China

In 2019, China exported US$53 billion worth of auto parts, but now firms are having orders cancelled in the US and Europe

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Workers are busy on the production lines at the workshop of Dongfeng Passenger Vehicle Company in Wuhan, central China's Hubei Province, March 24, 2020. Photo: Xinhua

Published: 7:29am, 3 Apr 2020Updated: 7:40am, 3 Apr 2020

After a nationwide shutdown in February, car parts exporter Rita Xiao was thrilled to join the bandwagon of factories resuming work across China in March, as the country’s coronavirus crisis began to cool.

But she is now wrought with anxiety, with the virus ravaging her clients in the United States and Europe. Xiao, along with many other Chinese exporters, is feeling the force of the dreaded second shock wave from the pandemic which has closed car factories across the world, in the sort of synchronised shutdown never before seen.

Orders in March fell by about 70 per cent, the Xiao said, adding that buyers were also requesting a suspension of shipments on the orders they’d already made. Her company, Chongqing Bona Auto Parts, exports a range of car parts to countries including the United States, which accounts for 20 per cent of overseas sales.

“They did not say they were cancelling the orders, but instead asked us not to ship the goods. But they did not proceed with the payment either. We now have goods sitting in the warehouse and may have to wait for a few months to know what’s next,” she said.

About 1,300 kilometres away in Guangzhou, Lindsay, a sales representative at Guangzhou Fengming Auto Parts Company who declined to give her surname, is suffering from the same problem.

Twenty-five per cent of the company’s revenue comes from US and European markets, but orders dropped by 70 to 80 per cent in March due to massive car factories closures across many countries, she said.

“It is a fact that we are severely affected, but at least our company is still running,” she said.

Amid mounting uncertainty, the coronavirus pandemic – which has claimed the lives of more than 52,000 people and infected more than 1 million worldwide – is creating new nightmares for many Chinese auto parts suppliers, who were already reeling from the US-China trade war.