China has been an integral part of global business

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Supply chain disruption and impact on companies
Automakers
According to Dun & Bradstreet, about 5 million companies have Chinese suppliers, from Apple, whose supplier Foxconn has postponed the restart of its Shenzhen factory, to food companies Kraft Heinz and PepsiCo, which have closed Chinese plants.
The outbreak could hardly have come at a worse time for oman number data carmakers, who are struggling with a variety of challenges. Wuhan is a major center for car production. France’s Renault and Peugeot, Germany’s Volkswagen and BMW, and Jaguar Land Rover have all yet to reopen factories that work with Chinese partners. Honda postponed the reopening of its Wuhan plant yesterday, while Hyundai closed its huge factory in Ulsan, South Korea, due to a lack of parts.



Auto plants across China have remained closed since the Lunar New Year holiday, preventing global automakers Volkswagen (VLKAF), Toyota (TM), Daimler (DDAIF), General Motors (GM), Renault (RNLSY), Honda (HMC) and Hyundai (HYMTF) from resuming operations in the world's largest auto market. The outbreak will force manufacturers in China to cut production by about 15% in the first quarter, according to S&P Global Ratings. Toyota said on Friday it would keep its plants closed until at least Feb. 17. Fiat Chrysler (FCAU) has drawn up contingency plans to avoid a similar outcome at one of its plants in Europe.

Tim Lawrence, head of manufacturing at PA Consulting, said it could take 6 to 8 weeks to get components from China to European factories: “It takes time to find other sources.”

Luxury market


Luxury goods makers that rely on Chinese consumers, who are spending big at home and on vacation, have also been hit. British brand Burberry (BBRYF) has closed 24 of its 64 stores in mainland China, cutting hours in those still open as customer traffic has fallen by 80%. Its chief executive warned that the virus will have a “material negative impact on luxury demand.”

London Fashion Week has just ended, but Chinese journalists and buyers were absent from the event. Their decision to stay away is a major blow to the luxury goods industry. Chinese shoppers are the biggest buyers of designer clothes and handbags, but as they stay away from stores and travel restrictions curb overseas purchases, big brands are starting to suffer.

Tapestry, whose brands include Coach, Kate Spade, and Capri, the owner of Michael Kors, Versace and Jimmy Choo, also cut its profit forecast. Analysts at investment bank Jefferies cut their 2020 sales growth forecast for the industry from 5% to just 1%.

Morningstar equity analyst Jelena Sokolova predicts that the short-term impact of the coronavirus will be greater than that of the 2002-03 SARS, as Chinese shoppers now represent 35% of designer fashion spending, compared to just 2% almost 20 years ago.

Tourism and airlines
Dozens of global airlines have cut flights to and from China. The virus has prompted 21 airlines to cancel all flights to mainland China, including Delta, United, Qantas and Air France/KLM.
Among the most popular international carriers, Hong Kong-based Cathay Pacific has been the hardest hit, canceling 90% of its flights to major cities in mainland China. About 30% of its network capacity has been cut and it has asked 27,000 of its employees to take unpaid leave to help the company stay afloat.