As the coronavirus spreads, assembly lines may take longer than expected to restart, causing a chain reaction around the world.
Many automakers had planned to reopen their Chinese factories on Monday, which was already a week later than planned following the traditional Lunar New Year holiday.
But several companies including BMW, PSA and Toyota have delayed restarting their assembly lines another week and others appear likely to. Even a relatively brief interruption in the flow of parts and materials could have far-reaching effects, analysts said. Two weeks is probably the buffer most people have got,” Mark Fulthorpe, a director at the market researcher IHS Markit who follows the auto industry, said Friday. “A disruption in the supply chain can multiply and have a dramatic effect.
The shutdowns at Chinese factories hit automakers from several angles. The virus is already causing them to lose sales in China, the world’s largest car market by far. If they are forced to close factories outside of China because of parts shortages, as Hyundai has already done in South Korea, they could also lose sales in other regions.
Because the auto industry is so vast, its pain would spread throughout the global economy. And it is hardly the only industry at risk from supply chain problems. Others include computers and electronics, textiles and heavy machinery.