Asia Minute: COVID-19 Shifts Regional Auto Production

Jun 4, 2020

Many businesses are re-opening in the state and across the country, and they are all adjusting to change. That includes the auto industry in the Asia Pacific.

Nissan is re-opening one of its biggest auto production hubs in the world in Thailand. Shifts will be staggered, factory floors have been re-arranged to allow for physical distancing, and some administrative staff will be working from home.

Just a week ago, Nissan announced it was closing its only plant in Indonesia — a factory that opened in 2014, but where the production line had been closed since March. It’s a snapshot of what is happening across the Asia Pacific and around the world — decisions on auto production based at least in part on local sales.  

The Jakarta Post reports car sales in Indonesia fell by 90% in April alone compared to a year earlier.

Other decisions and changes have to do with managing supply chains.

Production was halted for a time for South Korean automakers because of a lack of parts coming from China. And while some complications were temporary, a lot of the structural flow of the auto industry in the Asia Pacific still goes through China — both for automakers and their suppliers.

For example, Automotive News reports that more 20% of Honda’s global production comes from two production hubs in China — one in Guangzhou in the south and the other further north in a city recently made more famous for other reasons: Wuhan.