Wireless equipment maker Ericsson is pulling out of the industry’s top annual trade event due to the coronavirus outbreak, while carmakers are considering whether to reopen factory lines in China.
Here is a look at the latest developments on how the virus is affecting global business.
Ericsson, one of the main suppliers of wireless networks and a rival to China’s Huawei, is pulling out of the Mobile World Congress in Barcelona, Spain, this month. The Swedish company said that because the show draws thousands of visitors, “even if the risk is low, the company cannot guarantee the health and safety of its employees and visitors”. Instead of the Barcelona event – scheduled for February 24-27 – Ericsson will bring demos to customers in their home markets. The organisers said Ericsson’s decision will hurt the event but they do not plan to cancel it. Huawei recently said it would still attend.
Japanese carmaker Nissan said sales in China in January by the company and its local partners fell 11.8% from a year earlier to 118,143 vehicles due to the coronavirus outbreak and the extension of the Lunar New Year holiday. Nissan said earlier it was considering reopening most of its factories in China on Monday but would wait until at least February 14 for facilities in and around Wuhan, the city at the centre of the outbreak. Toyota said it was keeping its factories in China closed for an extra week, until February 16, and will decide then whether to resume production. Toyota has 12 plants in China, including four vehicle assembly plants. Honda said its three car assembly plants in Wuhan would stay closed until February 13.
Japanese clothing retailer Uniqlo said it has closed 350, or about half, of its 750 stores in China, to comply with shutdowns of public transportation and closures of shopping centres. Parent company Fast Retailing said about 20% of its sales come from China. British firm Burberry, which gets about 40% of its revenue from China, said the impact has been significant. It shut 24 of 64 stores in China, and told the FT footfall had dropped as much as 80%. The impact in Hong Kong is bigger than from the protests, which had halved sales there in the last quarter.
L’Oreal joined the growing list of beauty product brands expressing concern over the potential blow to sales due to travel restrictions that are vastly reducing demand from travel shopping at duty free shops. The company said it expected a “temporary impact” on Asia’s beauty market, but that past experience suggests that “after a period of disturbance, consumption resumes stronger than before”.