Hey@Rojam and @MTVThe Chinese manufacturing sector has a...

Hey@Rojam and @MTV

The Chinese manufacturing sector has a cultural, annual phenomenon that provides factories with a 'zero cost 'redundancy mechanism.

My recollection was that a factory churn rate was @30% around the Chinese New Year Period. A significant number of employees simply don't come back after the holiday. Seriously.

I just googled to see if my recollections were correct and this article suggests it is as high as 80%! Sounds a bit over the top for me but the point is that given the New Year Celebrations are usually around the end of January, if you want to scale back I figure you just don't recruit.

This year the 'official' holiday period was Feb 10 to Feb 17.

https://trans.info/en/chinese-new-year-production-376821

So in answer to your question R, my guess is that production has probably been scaled back.

Scaling back would be a lot easier / less problematic than in other regions, so I don't think there will be a significant inventory problem from the point of view of out of control stock levels.

Given the robustness of Vmoto's Supply Chain, I imagine it would be pretty easy to flick the switch as demand picks up even if (hopefully) it is 'lumpy'.

I also imagine that into the future, the dynamics around this phenomenon will change as (again) I hope JVs in different regions (Currently Indonesia and Brazil) and hopefully growing) will see a reduced overall reliance on Chinese production.

Of course that leads into the thinking around the Nanjing factories and, again I am speculating, the reversed roles of Chinese manufacturers with Western Brands/Marketers.

If you want to read more about that, I recommend a chap called Augustin Friedel. His focus is mainly on 4W stuff but he will give you the gist.





Cheers