(Yicai Global) April 15 -- Chinese automakers may be forced to suspend production next month if suppliers do not get back to work soon, according to He Xiaopeng, chief executive officer of electric vehicle startup Xpeng Motors.

He took to social media yesterday to call on supply chain firms in Shanghai and its environs to resume operations as soon as possible in order to avoid car production shutting down across China in May. He also noted that some government departments are working to reopen factories.

Auto industry suppliers have suspended output or have introduced so-called closed-loop management, isolating workers so as to avoid a shutdown, because of the latest wave of Covid-19 in the country. Outbreaks in Shanghai and Jilin province, major auto production centers, have led some carmakers to halt output since last month.

German engineering giant Robert Bosch’s auto parts factories in Shanghai and Changchun are closed, while its other plants in Shanghai and in nearby Taicang are operating closed-loop management.

Chinese power battery giant Contemporary Amperex Technology has also implemented a closed-loop management model at its major factory in Ningde, Fujian province, which was also hit by a Covid-19 outbreak earlier this month. The local government has reportedly banned trucks from bringing raw materials to the city.

Some insiders told Yicai Global that even if factories resort to closed-loop management, they can only manage low levels of production because of stoppages due to a lack of manpower and poor supply of raw materials.

A number of carmakers including FAW Group, Tesla, MBW Brilliance, and Nio have each announced the suspension of production. Tesla’s Shanghai factory has been closed since March 28, causing lost production of about 39,900 cars so far, Bloomberg News reported today. Located in areas not affected by Covid, Xpeng’s assembly lines are still operational.

Nio, one of Xpeng’s main competitors, said yesterday that although its plant in Hefei, Anhui province, is gradually getting back up and running, output will depend on the recovery at suppliers. Nio announced a production halt on April 9, with founder Li Bin saying the supply of parts and components had been cut off since mid-March.

Great Wall Motors has been forced to stop making its mid-size sports utility vehicle, the Tank 300, after the Covid-19 outbreak caused eight suppliers to halt output, the automaker said on April 13.

Many carmakers saw output slump last month, according to the China Passenger Car Association. Production of FAW’s luxury car brand Hongqi and at FAW Volkswagen plunged 73 percent and 46 percent, respectively, from a year earlier. Output at SAIC-GM, SAIC Maxus, Beijing Benz Automobile, and BMW Brilliance fell 31 percent, 34 percent, 31 percent, and 51 percent, respectively.

Shanghai is one of the most important car production bases in China, with 2.8 million units made in 2021, accounting for 10.6 percent of the country’s total that year, according to the National Bureau of Statistics.

Editor: Futura Costaglione