Wheel Adapter Manufacture in China :New problems in the Busy Season in 2020

2020 is a very special year because of the coronavirus (COVID-19) . Most industries have been affected a lot. As a supplier of wheel adapters & wheel spacers in China , we were very worried about the business this year at the beginning ,even though china government control the virus spread well.

In the first half year , we did have a lot orders under producing which most were placed before and during Chinese Spring Festival (Feb) . we didn’t know when we could recover production before Apr . Luckily, government controlled the virus well, and lifted the ban . we started to arrange production for the backlogged orders . It is really good for us factories. But we had new concern. The covid-19 virus spread very quick in other countries . the situation is very bad in our oversea markets . we exported 90% of the wheel adapters & spacers mainly to the US and European countries . we had a negative forecast that the sales would decreased sharply. This would take our business in a terrible situation.

But it is very strange that we got more orders ,and some order qty much more than usual . we have been getting very busy since July . And our factory got overloaded production . The delivery term change to 60 days ,and even more , while it is just 20-30 days in usual . It is not just us . Most of other suppliers have the same situation . Most factories are very busy in producing .

It is very good situation for us logically speaking . But it is not ,now. We got new problems .

1.Hot sales led to the shortage of raw material . The aluminum price got increased about 20% in November. we cannot increase the price for the items in the orders which confirmed already.

2.The exchange rage of CNY to USD has risen to 6.53 from the highest point 7.077 . It is negative situation for our export business. Export business margin is getting lower and lower.

3.We already in the situation of overloaded production . And many orders have been arranged after the spring festival . The longer delivery term increases the risk of profit margin decreasing which caused by increasing cost of raw material,and the decreasing of exchange rate.  Many orders have been in very low profit margin , and even no margin .

With these 3 reasons, we are very prudent to the new orders . It is not only for us , most suppliers in china have the same situation now .For current orders, we have to improve the production capacity . Therefore , customers can get the goods in a not very long time.


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