China’s second-biggest automaker Dongfeng Motor has resumed limited operations in Hubei province, the epicenter of the Covid-19 outbreak, as authorities begin relaxing containment measures amid a decline in the number of new confirmed cases in the country.
Why it matters: The resumption of work in Hubei, known as a Chinese “motor city,” could accelerate the industry’s supply chain recovery and help normalize the country’s auto market after the Covid-19 disruption.
- Hubei is China’s fourth-largest auto production province and accounted for 10% of the country’s car-making capacity last year, official figures showed. It is also home to global automakers in China such as Honda and Renault and more than 500 auto part suppliers including Bosch and Valeo.
Details: Dongfeng Honda, a joint venture between Dongfeng and the Japanese automaker, on Wednesday partially resumed production in its facilities in Wuhan, capital of central Hubei province, according to Reuters.
- Earlier this week, provincial regulators began lifting a temporary ban on local auto production, allowing Honda’s JV and another Dongfeng plant to reopen, according to a government document obtained by Chinese media.
- More manufacturers are still awaiting approval, including Dongfeng’s JV with Renault and a SAIC-GM joint plant. Less than a quarter of car factories in Hubei have restarted production, including half of Dongfeng’s facilities, the China Association of Automobile Manufacturers (CAAM) said on Thursday.
- Dongfeng Honda is the biggest automaker in the region with production of 792,000 units from its three plants last year, accounting for more than half of Wuhan’s automobile output. However, it reported zero output in passenger vehicles in February, as did Dongfeng Renault, sales figures released (in Chinese) Wednesday showed.
Context: Previously, Honda had repeatedly postponed plans to restart production in Wuhan, first on Feb. 14, then on Feb. 21, as many regions remained under quarantine.
- Honda is a latecomer in electric vehicles (EV), unveiling its first production model Honda E with a maximum range of 220 kilometers (137 miles) and a starting price of £26,160 ($32,000) in Europe in September.
- Japan’s third-largest automaker in July revealed plans to develop an EV-specific architecture for China and the US, the world’s two biggest EV markets, with expected delivery in 2025.