Workers work on the assembly line at a factory of vehicle manufacturer BYD Auto in Xi'an, northwest China's Shaanxi Province. File photo: Xinhua

Production at a number of factories in Xi'an, capital city of Northwest China's Shaanxi Province known for Terracotta Warriors— which also houses industrial parks for carmakers including BYD and Geely as well as manufacturers of aircraft and aero-engines such as Xi'an Aircraft Industry Group Company (AVIC) —has been partly suspended amid a COVID-19 epidemic flare-up that prompted local authorities to issue lockdown orders for at the city's more than 10 million residents, the Global Times learned.

While some manufacturers have announced work-from-home policies and imposed closed-loop management on frontline workers, among other anti-epidemic measures, to keep production lines running, sourcing raw materials and shipping products from out of the city has grown to become another headache undercutting local firms' efforts to stabilize supply. 

With a drop in vehicle output, some industry insiders estimated that transportation of certain car models mainly manufactured by BYD's Xi'an plants could further be postponed for several months, weighting on its delivery and sales. In terms of the aerospace manufacturing, industry insiders said the impact could be limited, as year-end is not the peak season for product research and development.

A BYD spokesperson told the Global Times on Friday that the outbreak has had a "certain impact" on its production in Xi'an, but the company is actively dealing with it. Starting from Thursday, local districts and entities in Xi'an were all required to be under closed-loop management. Manufacturing industrial parks were reportedly also closed and workers required to stay within the park.

Medical staff conduct nucleic acid tests in a community in Xi'an, Shaanxi Province on December 21, 2021. Photo: VCG

Xi'an is one of the most important production bases for new energy vehicle—maker BYD, manufacturing popular NEV models including Qin DM-i and Song DM-i series, according to media reports. In November, the Xi'an plant manufactured 55,000 units, accounting for over half of its output that month based on the Global Times' calculation.

Some buyers of BYD NEVs said that they were informed by a local salesperson that the delivery of popular models could be delayed due to the outbreak. A Wuhan-based consumer surnamed Gu told the Global Times that he placed order for BYD's Song DM-i series in May and has been waiting for seven months for its delivery. "I was listed among the next batch of customers to receive new cars, but now I was told to wait more as delivery will be postponed following the outbreak," Gu said.

A Xi'an-based clothes-maker told the Global Times that some local big firms have maintained partial production. "But transportation now remains a hurdle, as most cross-provincial logistics services have also stopped and there are no drivers. Our company will only be able to ship clothes outside the province once the lockdown is lifted."

BYD's shares slipped 3.57 percent to 270 yuan ($42.39) on Friday's close. 

China's photovoltaic company LONGi Solar said in an announcement on Thursday that its factories in Xi'an were unaffected and they completed all disinfection and anti-epidemic measures. Workers at the production line are under point-to-point, closed-loop management.

A board secretary of the domestic leading aircraft producer AVIC told the Global Times on Friday that the current outbreak in Xi'an is not having any impact on the company's business since they have attached great importance to prevention and control of the epidemic from the beginning. 

The local outbreak has also had no particular impact on the company's supply chain, "as an aircraft manufacturer, our spare parts and equipment will naturally not be bought whenever we need, and the inventory is absolutely sufficient," she said, adding that the company has several prevention and control measures in place, including employees now taking a nucleic acid every two days and full-portion meals.

Qi Qi, an industry observer, told the Global Times that as the virus is likely to be put under control within a certain time, the impact on the aerospace will be very limited. "Year-end is mostly a time for summarizing and is not a major period for airplane R&D," Qi explained.