Automotive executives are shaken by a global shortage of semiconductors reaching production in China, after hoping that the world’s largest car market could lead to a global recovery in the sector.
Automakers around the world have had to adjust assembly lines due to shortages caused by manufacturing delays that some semiconductor manufacturers blame on a faster-than-expected recovery from the coronavirus pandemic.
Volkswagen AG (VOWG_p.DE), China’s largest foreign carmaker, which wants to sell more than four million vehicles in the country, said the impact of the deficit remains uninterrupted in the second quarter of this year.
Stephan Woellenstein, the Chinese head of Volkswagen, told reporters on Sunday that it is difficult to assess the amount of production that Volkswagen may lose week by week or even month by month due to lack of chips.
“It’s really like putting out fires … In some cases, we switched to another chip, so we changed suppliers,” he said before the Shanghai car show, which opens Monday.
China, where more than 25 million vehicles were sold last year, has become a ray of hope for automakers, including Volkswagen and General Motors (GM.N), as the global car industry has been hit hard by the pandemic.
However, China is also where news of the lack of car chips first appeared last year. The shortage was exacerbated by a fire at Japan’s Renesas Electronics (6723.T) chip factory in March.
In 2019, car groups accounted for about a tenth of the $ 429 billion semiconductor market, according to McKinsey, with NXP Semiconductor (NXPI.O), Infineon of Germany (IFXGn.DE) and Renesas among the key suppliers in the sector.
Automakers, including Nissan Motor (7201.T), Ford Motor (FN) and Nio Inc (NIO.N), said they reduced production due to a lack of chip supply.
Li Shaohua, a senior official at the China Automobile Manufacturers Association, said the lack of chip supply hit car production by 5% to 8% in the first two months of this year, and the impact is expected to ease from the third quarter. of this year.
As a result, the Chinese Automobile Dealers Association said it expects car inventories to continue to fall in China as chip shortages hit overall car production. The supply of car models may not be able to meet demand.
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