The new coronavirus that is affecting large swaths of Mainland China deeply affected supply chains around the world. China is the largest manufacturer of goods in the world and since nearly everything is made there, a disruption in supply was to be expected as soon as the quarantine was initiated. That affected car makers as well, including BMW. The Bavarian company’s biggest car plant in the world is located in China and operated with the help of its local partner, Brilliance Automotive.
The facility was closed at the end of January as the coronavirus was starting to make headlines around the world. At that time, the official reason for its closure was the Lunar New Year holiday but that has passed now and BMW confirmed with a post on social media that the plant will remain closed until February 17. This extended closure will surely affect the sales figures of the company as most of the cars made in China are destined for the Chinese market, the biggest for BMW in the world.
The Chinese location can build up to 500,000 units per year, right now, most of it aimed at the local market. The Shenyang location is currently expanding and when finished will be capable of churning out 650,000 units per year.
How much of an impact this prolonged closure will have on the industry overall is hard to estimate. Some experts are saying that the quarantine which forced plants to close temporarily will cause China to lose out on about 1 million cars.
This could lead to a dip of up to 5 percent in value for companies such as BMW or Volkswagen over the first half of 2020. It’s not just cars that are affected but spare parts too, most manufacturers using plants in Mainland China.