Chip shortage casts shadow on China's auto industry recovery

Auto industry executives are rattled by a global shortage of semiconductors which is hitting production in China, after hoping the world's biggest car market could spearhead global recovery in the sector.

File photo of a semiconductor chip and board designed to speed up servers that cater to a growing number of mobile devices - from drones to self-driving vehicles - that perform better with AI. (Bloomberg)
File photo of a semiconductor chip and board designed to speed up servers that cater to a growing number of mobile devices - from drones to self-driving vehicles - that perform better with AI.

Automakers around the world have had to adjust assembly lines due to the shortages, caused by manufacturing delays that some semiconductor makers blame on a faster-than-expected recovery from the coronavirus pandemic.

Volkswagen AG, China's biggest foreign automaker which wants to sell over four million vehicles in the country, said the impact of the shortage remains unabated in the second quarter this year.

Also check these Vehicles

Find more Cars
Mahindra Xuv300 Turbo Sport (HT Auto photo)
₹10.35 - 12.9 Lakhs***Ex-showroom price
Add to compare
Check latest offers
Mercedes-benz Amg E53 Cabriolet (HT Auto photo)
2999 cc | Petrol | Automatic
₹1.3 Cr**Ex-showroom price
Add to compare
Maruti Suzuki Ytb (HT Auto photo)
UPCOMING
₹7 - 11 Lakhs* *Expected Price
View Details
Maserati Mc20 (HT Auto photo)
₹3.69 Cr***Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki Baleno (HT Auto photo)
1197 cc | Petrol | Manual
₹6.5 - 10 Lakhs***Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki S-presso (HT Auto photo)
₹4.25 - 5.99 Lakhs***Ex-showroom price
Add to compare
Check latest offers

Stephan Woellenstein, Volkswagen's China chief, told reporters on Sunday it was hard to gauge how much production Volkswagen might lose week to week or even month to month because of the chip shortage.

"It's really like fire-fighting... In some cases, we have switched to another chip so we changed suppliers," he said, ahead of the Shanghai auto show which opens on Monday.

China, where over 25 million vehicles were sold last year, become a ray of hope for automakers, including Volkswagen and General Motors, as the global auto industry was hit hard by the pandemic.

However, China is also where news of the auto chip shortage first emerged last year. The shortage was worsened by a fire in Renesas Electronics' chip factory in Japan in March.

In 2019, automotive groups accounted for roughly a tenth of the $429 billion semiconductor market, according to McKinsey, with NXP Semiconductor, Germany's Infineon and Renesas among key suppliers to the sector.

Automakers, including Nissan Motor, Ford Motor and Nio Inc said they cut production due to the chip supply shortage.

Li Shaohua, senior official at China Association of Automobile Manufacturers, said chip supply shortage hit auto production by 5% to 8% in the first two months this year and expects the impact to ease from the third quarter of this year.

As a result, China Automobile Dealers Association, said it expects car inventory to continue to drop in China as the chip shortage hits overall auto production. Supply of some car models might not be able to meet demand, it said.

First Published Date: 19 Apr 2021, 10:43 AM IST
Recommended for you
View all
NEXT ARTICLE BEGINS
Shopping Bag Shop Now
55% OFF
SOFTSPUN Microfiber Cloth - 4 pcs - 40x40 cms - 340 GSM Grey- Thick Lint & Streak-Free Multipurpose Cloths - Automotive Microfibre Towels for Car Bike Cleaning Polishing Washing & Detailing…
Rs. 269 Rs. 604
13% OFF
Involve Your Senses One Musk Organic Car Perfume, Involve Your Senses Strong Fiber Air Freshener to Freshen'up Your Car - IONE01-40 g,Car Accessories interior car perfumes and fresheners
Rs. 349 Rs. 399
73% OFF
pTron Bullet Pro 36W PD Quick Charger, 3 Port Fast Car Charger Adapter - Compatible with All Smartphones & Tablets (Black)
Rs. 349 Rs. 1,299
14% OFF
Jopasu Car Duster
Rs. 749 Rs. 869

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city