Home Stock Market Shortages of chips cast a shadow on the Chinese auto industry's recovery

Shortages of chips cast a shadow on the Chinese auto industry’s recovery

© Reuters. A Volkswagen ID.6 X is on display before the Shanghai Auto Show, in Shanghai

By Norihiko Shirouzu and Yilei Sun

SHANGHAI (Reuters) – Automotive industry executives are puzzled by a global shortage of semiconductors affecting production in China, after hoping the world’s largest car market has could spur a global recovery in this area.

Automakers around the world have had to adjust assembly lines due to shortages, caused by production delays that some semiconductor makers blamed for faster recovery than expected. ants from the pandemic coronavirus.

Volkswagen AG (OTC :), China’s largest foreign carmaker that wants to sell more than 4 million cars in the country, said the impact of the car shortage remained unchanged in the second quarter of this year.

Stephan Woellenstein, China Director of Volkswagen (DE :), told reporters on Sunday that it is difficult to gauge how much production Volkswagen could lose from week to week or even month to month. another because of the lack of chips.

“It’s really like firefighting … In some cases, we have switched to another chip so we have changed suppliers,” he said, ahead of the opening of the Shanghai auto show. in Monday.

China, where more than 25 million vehicles were sold last year, has become a spark of hope for automakers, including Volkswagen and General Motors (NYSE :), as the global auto industry is affected. heavy by the pandemic.

However, China was also the site of news about a shortage of car chips first last year. Shortages worsened by the fire of Renesas Electronics’ chip factory in Japan in March.

According to McKinsey, in 2019, automobile groups account for about a tenth of the total $ 429 billion in semiconductor market, with NXP (NASDAQ 🙂 Semiconductor, German Infineon (OTC 🙂 and Renesas among the suppliers. main level for the field.

Automakers, including Nissan (OTC 🙂 Motor, Ford Motor (NYSE 🙂 and Nio (NYSE 🙂 Inc, say they cut production due to a shortage of chip supplies.

Li Shaohua, a senior official at the China Association of Automobile Manufacturers, said a shortage in chip supplies had caused car output to drop from 5% to 8% in the first two months of this year and is expected. The impact will be reduced from the third quarter of this year.

As a result, the China Association of Automobile Dealers said it expects car inventories to continue to decline in China due to the lack of chips affecting general auto production. The supply of some models may not meet the demand.

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