Factories across China remain closed since Chinese New Year from the Coronavirus outbreak. What does this mean to the Australian Automotive industry and more notably what does this mean for the availability of OEM and spare parts for cars in Australia?
China is Australia’s largest trading partner for imports and exports. According to the United Nations Comtrade database, Australian imports from China were valued at $85.9 billion in 2018. The automotive industry is expected to be one of the largest affected by the outbreak.
How are European Made Cars Affected?
While European cars like BMW, Audi and Volkswagen might be manufactured in Europe, they are reliant on parts that are made in factories in China. On average it takes 30,000 parts to make a finished automobile. It only takes one small missing part to have a knock on effect to the entire supply chain e.g. if a tyre manufacturer doesn’t receive a valve from their supplier in China, a car manufacturing plant in Germany will not receive any tyres and will not be able to supply cars to their customers.
What does the coronavirus mean for the spare parts industry?
While the coronavirus will have a more immediate threat on new car manufacturing, we should not be ignoring the fact that there will be a shortage of OEM parts for repairs and mechanical works required on existing vehicles.
Here are ASV Euro Car Parts, we have a large range of OEM parts who have Chinese factories, including Zf, Valeo, Bosch and Brembo Brakes. Despite all their factories having extended their Chinese New year factory closures, Brembo’s Chairman Alberto Bombassei has said “the immediate impact is very limited…” and Valeo is reporting that they have not suffered any operational impact from the outbreak of the coronavirus in Wuhan.
While we are yet to see any supply issues, we cannot ignore the fact that many of these factories still remain shut and have been since Chinese New Year.