Foreign companies in China remained confident of the growth potential of the Chinese market in the long term despite the temporary impact of the novel coronavirus outbreak in the country.
Currently, analysts and enterprises are trying to figure out what implications the virus will have on the outlook of the Chinese economy, as the government has taken unprecedented measures to contain the epidemic, including extending the Spring Festival holiday and partially suspending public transportation.
"We expect this to be a temporary situation," Starbucks CEO Kevin Johnson said in an earnings call earlier this week.
The coffee chain giant has temporarily shut down more than half of its approximately 4,300 stores on the Chinese mainland in response to the coronavirus outbreak.
Some stores in China's major cities such as Shanghai remained open to the public during the Spring Festival holiday, checking body temperatures at the entrance and regularly disinfecting the store.
Despite the impact of the coronavirus, Johnson said the company will remain optimistic and committed to the long-term opportunity in China, building on its brand heritage and 20-year legacy in the market, adding that Starbucks will continue to monitor and modify the operating hours of its stores in response to the outbreak of the coronavirus.
Similar to Starbucks, U.S. electric car maker Tesla also supported the Chinese government's containment efforts by temporarily shutting down its gigafactory in Shanghai.
The company's vehicle deliveries are expected to exceed 500,000 units in 2020, and production will likely outpace deliveries this year partly due to the release of the Model 3 in Shanghai, according to its fourth-quarter and 2019 full-year financial results.
Tesla CFO Zachary Kirkhorn expected a one to one-and-a-half week delay for the Shanghai-built Model 3 due to the factory shutdown.
Kirkhorn said the temporary shutdown may slightly impact the company's profitability for Q1 2020 but the impact is "limited" as the profit contribution from the Model 3 in Shanghai remains in the early stages.
Despite temporary revenue losses due to the coronavirus, foreign companies remained upbeat about the long-term growth potential in China, with plans to expand their footprints in the Chinese market.
Vaillant, a German heating brand, forecasts an over 10-percent decline of its Q1 businesses in China due to shrinking demand caused by the coronavirus outbreak.
Entering the Chinese market in early 1995, the company has established over 30 branches in China and plans to increase its investment in the country by launching new wall-mounted boiler production lines.
"I think our long-term demand will continue to rise as Chinese consumers tend to attach more importance to household products featuring a healthy and comfortable lifestyle," said Li Lintao, general manager responsible for Vaillant's heat supply businesses in China, adding that new growth drivers are emerging in smaller Chinese cities.
Allergan, a Dublin-headquartered pharmaceutical company, invested 18.75 million U.S. dollars in a medical equipment company in the Shanghai free trade zone last year.
Wang Wei, president of Allergan China, expressed confidence in the Chinese government's ability to win the battle against the coronavirus and restore normal social order. "Current short-term difficulties will not change Allergan's confidence in the Chinese market."
