Like all automotive suppliers in China, Novares is struggling to limit the impact of the coronavirus on its production and the supply chains of its manufacturing customers. But the partial resumption of activity on the spot does not signal the end of the crisis, warns the company.
With 1.4 billion euros in annual turnover and 12,000 employees, the company, which specializes in plastic parts, is a major player in the sector. “We have 47 factories worldwide, including 5 in China, and more specifically in Wuhan” [the epicenter of the epidemic, editor’s note], explains its general manager, Pierre Boulet, the CEO.
Factories under regime
The first four run “at 50% of their capacity,” he says. Production is limited by the number of operators who have the right to be present because a number of our employees have not yet completed the mandatory quarantine period before returning to work. But as the coronavirus has also plunged sales in China, demand to fuel local car production remains weak.
In Wuhan on the other hand, in accordance with the instructions of the local authorities, “there is zero activity”, recalls Pierre Boulet. Containment measures remain very strict, and there is nothing to say at this stage that the factories in the area will be able to restart around March 10, as is currently envisaged.
Problem, “most of the molds [to make the plastic parts, editor’s note] that are in Wuhan are unique,” said the leader. Certain parts cannot therefore be manufactured elsewhere in the world, which threatens the production of certain models.
Disorganized logistics flows
Second concern, disorganization logistics flows from China to Europe . “The supplies between sites in China are erratic, some trucks remain blocked for half a day or a day, but it is done,” reports the boss of Novares.
But for deliveries outside of China, “it’s more complicated,” he continues. Many train and boat trips have been canceled in recent weeks. Now that the exchanges restart, all the capacities are already reserved. The cost of shipping by boat has tripled. “
Supply shortages in sight
This should therefore eventually pose supply problems for certain European factories. “The transport time for this type of product is three to four weeks,” explains the manager. Parts continue to arrive, but the flow has been defused. There are therefore shortages of supply for certain European factories, unless the manufacturers decide to launch exceptional air transport. A solution studied very closely by some of them.