March 12, 2020 / 11:17 AM / in 17 days

VW does not expect China slowdown to disrupt its global supply chain - manager

FRANKFURT, March 12 (Reuters) - Volkswagen does not expect supply bottlenecks from China to disrupt the carmaker’s global production network, a senior China manager at the carmaker told Reuters on Thursday.

“We currently expect there to be no disruptions at other sites,” the manager, who declined to be identified, said.

Measures designed to contain the spread of the coronavirus had disrupted normal life, making it impossible to forecast whether economic activity in the world’s largest car market will return to levels prior to the outbreak, the manager said.

Car demand in the Chinese market was down 80% in February and will likely be between 40% and 50% below year-earlier levels in March, the manager said.

“If restrictions continue to be eased, then we are cautiously optimistic that we could return to the year-earlier level of demand by June or July,” the manager said.

The desire to avoid densely populated areas and public transport has motivated some potential buyers to inquire about buying a car, which could lead to sales rebounding quickly.

“In the crisis the Germans want to buy toilet paper, and the Chinese want to buy a car,” he said.

However the level of domestic demand can only recover if business sentiment remains positive, he said.

Demand in China is dependent on the economic health of some of its largest export markets, like the United States, which is also being hit by the coronavirus, the manager added.

“I cannot say whether it will be a boom in the second half of the year or if we return to normal, an outlook for the rest of the year is not possible,” the manager said. (Reporting by Edward Taylor and Ilona Wissenbach, editing by Thomas Escritt)

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