How does China solve supply chain snags in auto parts industry? – CGTN

June 13, 2022 by No Comments

The automobile manufacturing industry is a pillar industry in Taizhou, east China’s Zhejiang Province. But hit by the COVID-19, over 6,000 local auto parts companies faced difficulties with declining orders and tight supply chains. Helping them stabilize the fundamentals of development has become an urgent task that looms over the local government.

Just two weeks ago, enterprises faced the risk of the supply chain disconnecting, as hundreds of raw materials were not available for production due to COVID-19-induced blockages in logistics and halts in production.

Amid the supply shortage, “We used to have two shifts, but now there are no night shifts, and the day shifts are also a half less than before,” Guan Huimin, head of the Shunyi Auto Parts Workshop in Taizhou, told CMG, adding that while another parts factory did not halt production, parts were always out of stock, which weighed on delivery.

As these companies focus on their own specific business, it is impossible for them to form a comprehensive product structure by themselves alone, said Xiao Junhua, deputy director of the Enterprise Office of Huangyan District, Taizhou City.

By collaborating, their ability to resist market shocks will strengthen he said.

After acknowledging the demand from enterprises, Xiao made a list with officials from the subdistricts and found that among the hundreds of accessories that were strained in the supply chain, many could be processed in Taizhou.

“Then we paired some of the enterprises to conduct the localization of production,” Chen Jianwei, deputy director of Xinqian subdistrict of Huangyan District, said.

In order to improve the success rate of matching, the subdistrict office also uploaded the information on the processing capabilities and technical expertise of each company to an online database so that the firms could choose based on their need.

The local government also facilitated cooperation between the Zhejiang University of Technology and enterprises on technology transfer and talent training, in an effort to help enterprises make up for technological shortcomings and complement the industrial chain.

To unblock logistics, the local government made efforts to coordinate with neighboring province Jiangsu and Shanghai, aiming to promote the smooth delivery of raw materials to enterprises. 

Auto parts firms in Shanghai have also ramped up their capacity since the resumption of production on June 1, after the city brought the newest wave of Omicron under control. 

The head of a Volvo factory in Taizhou told CMG that it had resumed normal production after getting materials it needed last week. 



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