Toyota, Starbucks and LVMH shut down some China operations over coronavirus fears
Japanese carmaker Toyota, US coffee chain Starbucks and French luxury goods company LVMH have all shut down some of their China operations in reaction to the spread of the coronavirus.
Toyota said today that it would keep its plants in China closed until at least 9 February in reaction to the spread of the virus.
LVMH, which owns brands such as Fenty, Louis Vuitton and Marc Jacobs, said it had shut some stores in the Chinese city Wuhan in Hubei province which is at the epicentre of the infection.
Wuhan has been quarantined to try and stop the spread of the disease which has killed 132 people and infected over 6,000 according to China’s National Health Commission.
Starbucks said yesterday that it was delaying a planned upgrade to its 2020 financial forecast because of the outbreak.
The world’s largest coffee chain said around half of its 4,292 stores in China were closed because of the virus.
There are also fears that the spread of the virus, and the draconian travel restrictions in place, will hit China’s economy.
Charalambos Pissouros, senior market analyst at JFD Group, said: “With the virus spreading quickly, it’s hard to predict when all this will end, where the number of deaths will stop, and to which extend this will affect economic activity.”
Pissouros said China’s official purchasing managers’ index (PMI) figures for January, which will be released on Friday, will be closely scrutinised for evidence of the effect the virus has had so far on China’s economy.
“Market participants could be on the lookout for clues as to whether the virus has already left its marks on the world’s second largest economy,” he said.
“In our view, the worst is yet to come,” Japanese securities firm Nomura said in a note, warning of a severe near-term blow to China’s economy.
“We expect Beijing to introduce a raft of measures to provide liquidity and credit support,” it said.
David Madden, market analyst at CMC Markets, said Chinese regulators were willing to intervene in the economy to minimise the impact from the contagion.
“During yesterday’s session the Chinese central bank claimed it was willing to use the tools it has at its disposal in order to counteract any negative impact on the economy,” he said.