China's auto sales plummet again in August

World’s biggest automobile market China registered a 17.8 percent dip in car sales in August from a year earlier. This is the fourth consecutive month of loss for China. The reason behind this is being stated as semiconductor shortage that has tightly gripped China, said a report by Reuters.

The overall sales in China stood at 1.8 million vehicles in August, said data from the China Association of Automobile Manufacturers (CAAM). The country in July too saw the sales fall by 11.9 percent from the same month a year earlier to 1.86 million vehicles, reported by the body. A senior official, Chen Shihua from the body said that the CAAM is now expecting a slower growth than the previously forecasted 6.5 percent.

The global semiconductor shortage has impacted many auto majors such as Ford Motor, Honda Motor, General Motors and Volkswagen, forcing them to halt or reduce production. In the recently concluded IAA Munich Auto Show, chiefs of Volkswagen, BMW and Daimler expressed their concerns about the crisis and mentioned that it may take months or even a few years for the issue to completely go away. The crisis is unlikely to get resolved in the near future as Covid-19 cases are surging in many South-East Asian countries, added the official.

The data on the other hand showed growth in new energy vehicles. Sales of new energy vehicles doubled in August to 321,000 vehicles. These vehicles include battery-powered electric vehicles, plug-in petrol-electric hybrids and hydrogen fuel-cell vehicles. The report also mentioned that the country's government is pushing for the promotion of greener vehicles to cut pollution and hence encouraging electric car makers such as Nio Inc , Xpeng Inc and BYD Co Ltd to expand the manufacturing capacity.

(With inputs from Reuters)