State authorities identified the initial explosion took place in a warehouse that belongs to Tianjin Dongjiang Port Rui Hai International Logistics Company Limited, located in the Binhai new area industrial centre. However, the cause of the explosions has yet to be determined. With the strong chemical odour in the air, some say the dangerous chemicals within the warehouse could be the reason; others claim it might have been the presence of oil and gas deposits where petrochemicals is a major industry for the area.

Taking advantage of Tianjin’s recently appointed status as a free trade area, the Binhai new area industrial centre houses the factories and offices of large foreign players of several manufacturing industries like aviation and automotive, such as Airbus and Volkswagen. In fact, in the aftermath of the explosions, the state media reported that thousands of vehicles made by at least four automakers were destroyed.

As a Volkswagen warehouse was located close to the site of the explosions, an estimated 2,750 vehicles were destroyed. Hyundai-Kia and Renaults also lost vehicles—an estimated 4,000 and 1,500 respectively. The extent of damage physically and economically for these automakers are hence quite significant, with that by Renaults totalling to at least 210 million yuan (US$33 million).

In a statement, Volkswagen said that they have begun to evaluate the state of damage for all their vehicles at storage facilities at the Port of Tianjin. “Under no circumstances will any cars damaged in this terrible accident make it to the market.”

Meanwhile, with the Tianjin port out of service, automakers and other industrial professionals who were affected by the explosions have begun making arrangements to use the Shanghai and Guangzhou ports instead.

Sources: CNN, Autonews