The Coronavirus outbreak is affecting mankind in all aspects of life, whether it comes to the brands we buy clothes from, restaurants that we love to eat, or places we love to go. A total of 630 people in China have died at the hands of the Coronavirus. Globally, the virus has had an effect on almost 31,400 people in the 25 countries and territories that it has managed to spread into. The loss being suffered from this deadly virus is not only in terms of human lives but also in terms of businesses. Every industry is suffering major losses and the car industry is no different.
According to the latest news, Toyota has decided to keep its plants located in China closed for another week. These plants were supposed to up and running from February 10 onwards. But as there are no signs of the virus being stopped, Toyota had no other option but to extend their shut down till February 17th. In the words of the spokesperson;
“The situation varies depending on the plant and its supply of parts. Also, there are additional considerations that must be given to the guidelines from local and regional governments, including things like logistics, so we cannot definitively say whether we will restart plant operations from February 17.”
Toyota holds the second position when it comes to the biggest automobile companies in the world and a company that big is sure to have more than one plant in almost every country. Toyota set up overall 12 plants in China by doing joint ventures with local companies like the FAW Group and the GAC Motor. Out of these 12 plants, 8 plants are used to manufacture individual parts or the components of the cars while the remaining 4 are used to manufacture the cars themselves. Now, thanks to the Coronavirus, all 12 plants are closed and are being used to manufacture no input whatsoever.
The car industry as a whole is a huge risk because of the virus. With China being the country that makes the most cars in the entire world, the international auto industry relies greatly on everything that has been happening in China. Not only that, but China also has the biggest market for automobiles in the entire world. This means that along with the supply, the demand is also being affected by the Coronavirus creating imbalances in the whole economy.
Although Toyota is a big company, it only manufactures 15% of its cars in China. This means that it might be not as exposed to the dangers of the current situation as the other smaller companies are. These companies carry out 90% of its operations and manufacturing in China because of cheap labor and now they might be at the risk of losing their business.