Automotive executives are plagued by a global shortage of semiconductors hitting production in China, after hoping the world’s largest automotive market could lead the global recovery in the sector.
Car manufacturers around the world have had to adjust assembly lines due to the shortages, caused by manufacturing delays that some semiconductor manufacturers blame for a faster recovery than expected from the coronavirus pandemic.
Volkswagen AG (VOWG_p.DE), China’s largest foreign carmaker that wants to sell more than four million vehicles in the country, said the impact of the shortfall remains unchanged in the second quarter of this year.
Stephan Woellenstein, head of Volkswagen in China, told reporters on Sunday that it was difficult to determine how much production Volkswagen could lose week to week or even month to month due to the shortage of chips.
“It’s really like a firefight … In some cases, we switched to another chip, so we changed supplier,” he said ahead of the Shanghai Motor Show, which opens Monday.
China, where more than 25 million vehicles were sold last year, is becoming a heap of hope for carmakers, including Volkswagen and General Motors (GM.N), as the global car industry was hit hard by the pandemic.
In China, however, there was also news last year about the shortage of automatic chips. The shortage was exacerbated by a fire at Renesas Electronics’ (6723.T) chip factory in March.
According to McKinsey, in 2019 about one-tenth of the $ 429 billion semiconductor market was, with NXP Semiconductor (NXPI.O), German Infineon (IFXGn.DE) and Renesas among the top providers in the sector.
Car manufacturers including Nissan Motor (7201.T), Ford Motor (FN) and Nio Inc (NIO.N) said they are reducing production due to the shortage of chips.
Li Shaohua, a senior official at the Chinese Automobile Manufacturers Association, said the shortage of chips in the first two months of this year hit car production by 5% to 8%.
As a result, China Automobile Dealers Association said it expects car inventory in China to continue to decline as the shortfall hits total car production. The supply of some car models may not be able to meet the demand, he said.
Our standards: the principles of the Thomson Reuters Trust.