Lockdown measures to tackle latest virus outbreak threaten automatic rebound

In Changchun, an industrial hub in northeast China, all automakers, including the Volkswagen Group and Toyota Motor Corp., are required to halt production for at least four days this week.

In Shanghai, China’s largest city, VW Group and Tesla Inc. have been ordered to halt production for two days. The same request can be applied to other automakers and suppliers as the Shanghai government combs through one local area after another with mass nucleic acid testing.

Under current mitigation efforts in China, whenever someone tests positive for the coronavirus, all immediate household members, neighbors and workplace contacts must quarantine for at least one week.

This has created another major problem, staff shortages, for businesses in major cities like Shanghai, even though the city has not imposed a general lockdown.

With a large number of infections detected during testing and even more people quarantined, most automakers, dealerships and other businesses in Shanghai are facing staff shortages.

On Wednesday, the latest coronavirus outbreak has spread to 28 of mainland China’s 31 provinces and municipalities.

Unless Beijing relaxes draconian pandemic control rules, more cities are likely to force local businesses to suspend operations and launch mass testing, inflicting another setback on China’s economy and disrupting the recovery of automobile industry.

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