Volkswagen, Toyota production hits snag due to Covid curbs in China

New Covid-19 outbreak in China which is the largest the country has observed in the past two years has once again led to work halts. Automakers such as Volkswagen and Toyota have suspended their production operations owing to this and this might impact the already stressed supply chain.

Toyota stated on Monday its joint venture with China's FAW Group had suspended production in Changchun, however, its Tianjin city operations remained unaffected. On the other hand, Volkswagen, which also has a joint venture with FAW, notified it had suspended production at its vehicle and component plants from Monday to Wednesday.

iPhone maker Foxconn which has also ventured into making electric vehicles has paused its operation in Shenzhen until further notice. The company has informed it would deploy backup plants to reduce disruption. Multiple Chinese provinces and cities have set restrictions following Beijing's zero-tolerance goal towards the infection as quickly as possible. China's Silicon Valley, Shenzhen, is carrying out mass testing after many new local cases were recorded. Officials have suspended public transport and have requested people to work at home this week as much as possible.

In a recent report, Volkswagen has shared its concerns about the Russian-Ukraine conflict and its consequences on supply chains that can hit the business in a more grave manner. Volkswagen CEO Herbert Diess had stated previously the war will impact many European economies in an unforeseen way and can also extend the already strained global semiconductor shortage.

Toyota had announced previously its decision to cut down the production of cars for the next three months due to a crunch in the availability of chips and other parts. However, the Japanese automaker did not give details about the number of cars that it will reduce in manufacturing.