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Auto Companies in Beijing Cut Production to Make Way for Olympics

2008-08-18    Source:english.chinabuses.com

Beijing-based automakers and suppliers reduced or suspended production due to restrictions imposed ahead of the Olympics to improve local air quality.


Automakers and suppliers normally use heavy trucks to transport components and vehicles. But the vast majority of the heavy trucks have been barred from driving in Beijing during the Olympics to avoid aggravating the city's already serious air pollution.


Enacted on July 1, the restrictions will be maintained until the end of the Paralympic Games.


The 2008 Beijing Summer Olympics runs from August 8 until August 24. It will be followed by the Beijing 2008 Paralympic Games, which begin on September 6 and end on September 17.


Beijing Hyundai Motor Co., a joint venture between Hyundai Motor Co. and Beijing Automotive Industry Holding Corp. (BAIC), is the largest carmaker in Beijing. Due to difficulties in sourcing parts and shipping its products, the company has cut its operations from two shifts a day to only one shift, say company sources.


In response to reduced operations of Beijing Hyundai, its suppliers have either halted or cut production of their plants located in the vicinity of Beijing.


Visteon suspended production of its auto interiors plant in suburban Beijing from August 4 to August 7. On August 8 when the Olympics began, the company also suspended the operation of its auto conditioner plant near Beijing, say sources close to Visteon. Both plants supply BAIC.


Meanwhile, an interior system supplier of BAIC told Automotive News China his company has also cut the production of its Beijing plant.


Two factors have forced the plant to reduce production, says the source. One is its inability to source sufficient supply of some chemical materials as the transport of the materials is forbidden during the Olympics; the other is less demand from its client Beijing Hyundai during the Olympics.


In addition to Beijing Hyundai, BAIC runs a joint venture with DaimlerChrysler AG. It also makes SUVs and pickups in Beijing Automobile Works Co. and commercial vehicles in Beiqi Foton Motor Co.


Despite the difficulties the Olympics have brought to their operations, BAIC's four subordinate automakers will continue to operate during the sports event, says Wang Hong, a BAIC spokesman.


To lessen their reliance on road transport for car distribution, BAIC's companies recently started shipping their cars to dealers by train. These companies also ramped up their production before April to make up for anticipated output declines during the Olympics.


BAIC expects its four subordinate auto manufacturers to sell a total of 1 million vehicles in 2008. Wang says BAIC will stick to this target.


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