Impact of Chinas COVID-19 Outbreak on the Automotive Industry and - PowerPoint PPT Presentation

May 2020 Impact of China’s COVID-19 Outbreak on the Automotive Industry and Recovery Connect with Philippe: Presentation by Philippe Thegner, Senior Advisor, Automobility Ltd. & Chairman of AASA China Aftermarket Forum

Overview of COVID-19 outbreak in China Back to work and Progressive reopening Status for the automotive industry and its recovery

OVERVIEW OF COVID-19 OUTBREAK IN CHINA China flattened the curve in 4-6 weeks thanks to aggressive policies aiming at breaking the chain of transmission (# of confirmed cases)  (Mar. 25) Hubei Province started to remove travel  (Feb. 29) 1.7 million test kits, 116 90,000 restrictions except for Wuhan million masks and 330,000 protective  (Jan. 27) Central and local governments will also gowns are produced nationwide daily  Wuhan announced to remove lockdown by Apr. 08 cover all medical expenses of suspected cases 80,000  (Jan. 26) 2nd emergency specialty field hospital began construction in Wuhan  (Mar. 24) 27 provinces and municipalities  Chinese army started taking over COVID-19 downgraded the level of Emergency Response designated hospitals in Wuhan 70,000  (Jan. 25) 30 provinces and municipalities  (Feb. 13) All suspected cases with COVID-19 clinical symptoms and featured CT launched Level-1 Emergency Response, incl. images started to be categorized as confirmed cases 60,000 lockdown measures  (Feb. 08) 2nd emergency hospital put in use with 1,600 beds in negative-pressure wards  (Jan. 24) Army medical forces, Shanghai,  Central government promised manufacturers to purchase to all extra-produced key medical 50,000 Guangdong Provinces sent the first medical supplies* teams to Wuhan  (Feb. 05) All confirmed and suspected cases are strictly required to be moved into hospitals  (Jan. 23) Lockdown began in Wuhan 40,000  Wuhan started to use hotels and student dormitories as quarantine zones for close contacts  1st emergency specialty field hospital began construction in Wuhan  (Feb. 03) Wuhan announced to retrofit convention centers and stadiums into mobile cabin 30,000 hospitals dedicated for mild-case patients  (Jan. 22) Central and local governments promised to  (Feb. 02) 1st emergency hospital put in use with 1,000 beds in negative-pressure wards cover all COVID-19 medical 20,000 expenses for confirmed cases  (Feb. 01) 730,000 test kits, 9.6 million masks and 20,000 protective gowns are produced nationwide daily  (Dec. 29) An 10,000 epidemiological survey Policies Resource began in Wuhan  (Jan. 20) Person-to-person transmission of released Summoned COVID-19 is confirmed Dec. 29 Jan. 12 Jan. 26 Feb. 09 Feb. 23 Mar. 08 Mar. 22 Mar.29 (Date) *Note: Incl. facial masks, test kits, protective gears and eyewears, infrared thermometers, etc. Source: Desktop research, Automobility analysis Automobility Ltd 3

OVERVIEW OF COVID-19 OUTBREAK IN CHINA China’s strict lockdown was made possible by the collective efforts of all citizens and millions of grass-root civil workers Partial lockdown for provinces and municipality but Hubei* Shanghai Xintiandi  Strict traffic controls in and out of the regions  14 days quarantine for people: who travel from key regions, Empty factories, city centers and transportation hubs and who had potential contact with infected persons or persons under medical assessment  All non-life-essential businesses and facilities are shut down until further notice (re-opened under strict supervision since Feb. 10)  Mandatory mask-wearing and temperature checks in public Beijing International Airport during the lockdown  Access restrictions (to non-residents) and exit controls in residential compounds and villages  Partial suspension of transportation services , incl. buses, ride-hailing, railways, flights, and ferry Complete lockdown for Hubei Province  All transportation services incl. buses, railways, flights, and ferry services are suspended, except for medical or life- essentials Foxconn Dormitory  Non-essential vehicles on urban and rural roads are banned ; highway exists are closed  All non-life-essential companies , incl. manufacturing plants, in Hubei Province are shut down until further notice  All non-life-essential facilities are shut down  Residential compounds and villages are under complete lockdown management *Note: Wenzhou, Zhejiang Province were under complete lockdown from Feb.4 to Feb. 19 Source: Desktop research, Automobility analysis Automobility Ltd. 4

OVERVIEW OF COVID-19 OUTBREAK IN CHINA Containment measures have “flattened the curve” with progressive reopening Cumulative COVID-19 Cases in Selected Countries Containment measures helping flatten the (as of Apr. 19, 2020) curve in Asian countries (# of confirmed cases)  Measures in Asia include: 800k - Mandatory mask-wearing in public - Temperature check at every gate 600k - Tracing through QR health code Business Wuhan - Widely available, free tests reopening reopening 400k - Isolation of infected people and close contacts 200k - Strict self-quarantine and early social distancing 0 Feb. 02 Feb. 16 Mar. 01 Mar. 15 Mar. 29 Apr. 12 Apr. 19 The U.S. Italy Spain France The U.K. Iran China Germany  Restart business on Feb 10 outside Hubei with work from home during first 2 week for white collar. Partial work from home on week 3. everybody back to work in office at beginning of March. Wuhan reopen early April  Focus asymptomatic and imported cases since March Source: Johns Hopkins University, Automobility Analysis Automobility Ltd. 5

IMPACT ON GLOBAL AUTOMOTIVE INDUSTRY Automotive production in China is gradually recovering to pre-pandemic level Chinese Automotive Industry Supply Chain in Wuhan  By the end of Mar., all tier- Work Resumption Rate Employees Returning Rate 1 suppliers in Wuhan have obtained work resumption 97% 82% approvals, and reached 95% work resumption 60% 50% rate , largely relieving the supply chain risk resulted from factory shutdown in this region Feb.19 Mar.28 Feb.19 Mar.28  Auto parts suppliers with significant operations in Wuhan, Hubei Province, “…As of Mar. 28, the capacity utilization rate of the “…As of Mar. 28, the capacity utilization rate of the include Bosch, Schaeffler, automobile industry nationwide has reached the same automobile industry nationwide has reached the same level ZF, Faurecia, Valeo, level as that of the same period last year...” as that of the same period last year...” Webasto , etc. —— Xin Guobin, Vice Minister of the MIIT —— Xin Guobin, Vice Minister of the MIIT Source: MIIT, desktop research, Automobility analysis Automobility Ltd. 6

IMPACT ON GLOBAL AUTOMOTIVE INDUSTRY Back to work: Establish pandemic response team at factory level • Manage all • Single • Direct and • Manage • Develop pandemic access periodic centralized protocol to related • Social disinfection procurement ensure communicatio distancing according to to secure all employee n and training • Temperatur protocol necessary wellness aligned in coordination e check • Ensure supplies with global EHS with global com • Mitigation compliance • Audit and HR measure Source: Lear Automobility Ltd. 7

IMPACT ON GLOBAL AUTOMOTIVE INDUSTRY Back to work: Preparation for entrance 1. Security Check: all employees must enter to the plant by the same entrance . 2. Specify place to take temperature : shall be taken before entrance to plant. Not allowed working with temperature over 37.5 3. Health QR code check: Only green QR code allowed to work, Yellow code shall remain in quarantine for 7 days, red 14 days 4. Keep the distance of 1.5m while waiting 5. Avoid crossing flow between 2 shifts , extend overlap timing for shift change 6. Specify area for mask delivery and for waste collection point for potentially contaminated waste 7. Specific area to address suspicious case that would be identified during the shift 8. Generalize and make workers aware of “barrier gestures” 9. Avoid physical contact avoid handshake and substitute by a smile or head move 10. Leave the doors and turnstiles open if possible to avoid having to push them 11. Space for hand washing must be designated Automobility Ltd. 8

IMPACT ON GLOBAL AUTOMOTIVE INDUSTRY Back to work: General rules 1. Around 1.5m social distance to be secured 2. Mask is mandatory in the workshop and meetings , 1 mask per employee per day, N95/FFP2 3. Frequent hand sanitation and gloves if contact required or cleaning wipes for button (lift) 4. Stop utilization of air conditioning in closed area during meeting 5. Mandatory use of safety glasses in the workshop to prevent virus transfer though eyes 6. Self check for potential symptom and report to supervisor immediately if issue Meeting Canteen  Maintain meeting to a maximum of  Clean and disinfect before break/dining designated capacity for each room  Seating following social distancing 1.5m  Always respecting social distance  Canteen table must be cleaned and  Secure ventilation between meeting disinfected before every batch of people  Cleaning and disinfection before and after  Set schedule to ensure social distance meetings  Remove common coffee makers in office  Follow diagram and specific layout for  Respect social distance on the auto seating dispenser + Get cleaning wipes for buttons  Lunch boxes are provided . Office employee can eat at their desk. Automobility Ltd. 9