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Chip Shortage Will Impact China’s Production of 2 Million Cars

According to media based in China, the resurgence of the COVID-19 epidemic in Malaysia has led to the closure of several semiconductor factories and chip production has come to a halt. The industry estimates that up to 2 million units of vehicle production in China will be affected in August and September.

For example, Bosch, one of the world’s largest auto parts suppliers, has affected the production of nearly 900,000 vehicles in China in August because the company’s chip supply was cut off.

It is estimated that the impact on China’s GDP could be on a scale of trillions of Yuan, or hundreds of billions of U.S. dollars. Such a chip shortage may continue until next spring.

According to the China Association of Automobile Manufacturers (CAAM), China’s vehicle production in July was down by 1.863 million units, which is 15.5 percent below the same month last year. Chen Shihua, deputy secretary-general of CAAM said, “The shortage of chips has been affecting the domestic car market since June. As a result, domestic passenger car production and sales have fallen for three months in a row.”

Source: Central News Agency, August 20, 2021