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Volvo shutting its plant in China due to new COVID-19 restrictions

Volvo

Volvo Cars announced the temporary closure of its production plant in Chengdu, China as the region is in lockdown again. The officials have implemented new strict protocols to control the spread of the coronavirus infection.

Volvo's spokesperson confirmed its decision to shut down its production factory on Thursday, Sept. 1 as the government tries to contain the coronavirus outbreak. It was added that the Swedish automaker's plant in Daqing is also affected by the latest restrictions.

"Due to the lockdown in Chengdu, Volvo Cars is temporarily suspending production at a manufacturing plant there," the company's spokesman said in a statement. "We are assessing the impact on the business and we'll continue to monitor the situation."

As per Reuters, the city of Chengdu announced the lockdown this week, and 21.2 million residents are ordered to stay at home. This is the most populous city in China that has been placed in strict lockdown after Shanghai was also placed in the same level of high restriction earlier this year.

Although Volvo is a Swedish firm, the majority of its stocks are owned by Geely Holding, a Chinese automotive company. It has been manufacturing vehicles in the country since 2013, and it sold nearly 172,000 units last year.

The lockdown in Chengdu was implemented following a 4-day citywide mass COVID-19 testing of residents. This is said to be an important battle for China against the outbreaks because this is the most populous region in the country.

It was reported that strict protocols were announced, and the government locked down people in their homes after Chengu reported 157 COVID-19 infections on Wednesday this week. The infections were said to have been transmitted domestically.

Finally, all the residents were ordered to be home by 6 p.m. on Thursday, and only one member of each household is allowed to go out to shop for food and necessities. The government firmly reminded people that the rules are to be strictly followed. It is not clear until when Volvo is closing its plant.

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