Pressure mounts on commercial vehicle sector, rebound expected after epidemic

Source:Global Times Published: 2020/2/13 22:56:50

Staff work on an assembly line in a car factory. Photo: IC

As the first wartime restriction order has been issued by Zhangwan District in Shiyan, Central China's Hubei Province amid the novel coronavirus pneumonia (CODIV-19) outbreak, pressure is mounting on the commercial vehicle industry, which is one of the city's economic pillar sectors. 

Manufacturers expressed concern about short-term sales but expect a rebound after the epidemic when industries can resume production comprehensively.

"Sales for at least the first quarter will inevitably be impacted," a sales manager at a local commercial vehicle producer, who wished to remain anonymous, told the Global Times on Thursday.

Though the resumption of the industry depends on the development of the epidemic, the manager said that he believes there will be a rebound afterwards when industries across the country resume production comprehensively with more economic stimulus measures being rolled out.

Shiyan, dubbed "auto city" or "the oriental Detroit," has developed into an industrial base for commercial vehicles in China, with more than 500 vehicle and parts production enterprises, nearly 100 billion yuan ($14.3 billion) of manufacturing stock assets and an annual production capacity of 500,000 vehicles, according to the news site of the local government.

Leading auto maker Dongfeng Commercial Vehicle Co, based in Shiyan, has 24,000 employees and annual production of 200,000 vehicles. Shares in its parent company Dongfeng Motor decreased 1.52 percent on Thursday to 3.9 yuan.

"Not only the commercial vehicle sector, the whole auto industry in the world will be hit by the epidemic," Feng Shiming, a veteran car industry analyst, told the Global Times on Thursday.

Due to the socialized division of labor, the impact on one part of the industrial chain will spread to the whole sector and even other industries, Feng said.

The direct negative impact on the commercial vehicle sector may last for half a year, he forecast, noting that the accelerating economic pressure brought about by the virus would cast a shadow on the demand for commercial vehicles.

Zhangwan District in Shiyan announced wartime restrictions, starting from the beginning of Thursday. All buildings will implement closed-off management and residents will not be allowed to enter or leave the buildings except for medical staff and other personnel responsible for basic supplies.

Xiao Xu, deputy director of Zhangwan District, said that the wartime restriction order was rolled out in a bid to shore up the current achievements of epidemic prevention and overcome the pressure from the next waves of infection, according to reports on Thursday.

Global Times


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