Economy, Asia - Pacific

'Global chip shortage could dent China’s car production'

Crisis may cut car production in China by about 2M units this year, warns business official

Riyaz ul Khaliq   | 15.10.2021
'Global chip shortage could dent China’s car production'

ANKARA

The worldwide chip shortage could have a serious impact on China’s car manufacturing industry, a Chinese business official warned on Friday.

The crisis “may reduce car production by about 2 million units throughout the year,” Chen Bin, executive vice president of China Machinery Industry Federation, said at the China Auto Supply Chain Conference in Chongqing, state-run daily Global Times reported.

“A single chip can affect the production and sales of millions of cars a year, and such fragility is a concentrated reflection of the ecological fragility of China’s manufacturing supply chain,” he added.

China, the world’s second largest economy, has also been affected by the global chip shortage – which was mainly attributed to the COVID-19 pandemic – as its automobile production and sales figures “fell for five consecutive months” from May to September this year.

Chinese manufacturers of mobile phone, machinery and tools, home appliances, and notebook computers have also been hit hard.

“Some products such as industrial sensors, basic industrial software, special raw materials, and precision instrumentation which rely heavily on imports will also be hurt further with natural calamities and man-made misfortune,” Chen said.

Around 20 million passenger cars and 5 million commercial vehicles were produced in China last year, according to market and consumer data portal Statista.

Tian Yulong, spokesman for China’s Ministry of Industry and Information Technology, said last month that the chip shortage and related issues were likely to persist for a while.

“Although it has been relieved to a certain extent, in general, the auto chip supply chain will remain tight for some time, and the current problem is still quite serious,” he said.

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