China’s automobile sales continue to decline due to chip shortages

Texas News Today

BEIJING — China’s car sales fell in the third quarter of last year due to a global chip shortage, which is curbing the world’s largest car market. This is the first reduction in a year.

Passenger car sales in September fell 17% year-on-year to 1.58 million units, according to the China Passenger Car Association, the worst decline since March last year. Sales were down 13% year-on-year from July to September.

The world’s major car markets are dealing with a historic chip shortage, and China is inevitable. The decrease intensified in the third quarter as the number of COVID-19 cases in Southeast Asia increased. This includes Malaysia, where semiconductors are sent for testing and packaging.

In recent months, US and Japanese car factories have stopped production due to semiconductor shortages. Car sales in the United States fell 25% in September, according to Wards Intelligence.

In China, tightening monetary policy, weakening real estate markets and declining manufacturing profits are hurting consumer confidence, said Choi Dong-shu, executive secretary of the Passenger Car Association.

Chen Zhihua, deputy secretary general of the government-backed China Automakers Association, said power cuts in various parts of China, where production was restricted in September, increased the risk of car production.

The China Auto Dealers Association said last month that it expected the worst of domestic semiconductor shortages to be resolved and supply problems resolved. Still, the retail market may take at least three months to be affected, the dealers’ association said.

In September, the global automaker’s sales in China were hit hard. Toyota Motor Ltd.

Sales in Southeast Asia fell 35.9% year-on-year to 115,000 units, driven by shortages in semiconductors and other components due to a rise in COVID-19 infections in Southeast Asia. Toyota recently closed some of its production lines in China, a spokesperson said.

Honda Motor Company Limited Ltd.

Nissan said sales in China fell by 28.1% Ltd.

Sales fell 26.2%, he said. Volkswagen’s sale of two Chinese joint ventures AG

According to the data of Passenger Car Association, it registered a decline of 48.6% and 23.1% respectively.

“Inventory levels are the lowest ever,” said Guan Bolang, a Toyota dealer in Guangzhou. He added that due to production interruptions, some models may take months to be delivered, during which consumers can cancel their orders. Meanwhile, as inventory of vehicles dwindled, Guan hesitated to offer discounts for fear of more profits.

General Motors Ltd.

The company said it delivered a quarterly report, but due to disruptions in the semiconductor supply chain, it delivered 623,000 vehicles in China in the July-September quarter, down about 19% year-on-year.

The number of semiconductors in modern automobiles can exceed 1000, from the ignition to the braking system. As global chip shortages continue to grow, automakers from General Motors to Tesla are forced to adjust production and rethink their entire supply chains. Illustration / Video: Sharon Shea

UBS’s Chinese automotive analyst Paul Gong said consumer demand in China is generally stronger in the fourth quarter, so supply chain disruptions are likely to have an even greater impact on sales.

In addition to shortages of semiconductors, automakers and component makers are also facing rising prices of materials such as cobalt, lithium, steel and aluminum, according to China’s auto industry regulators, vehicle manufacturers and suppliers. Cobalt and lithium are needed to make the batteries for most electric vehicles.

Rising raw material costs are in line with the growing demand for electric vehicles in China. According to the Passenger Car Association, sales of new energy vehicles (mainly electric vehicles) in China reached 334,000 units in September, more than three times the level last year.

Tesla Ltd.

According to data from the Passenger Car Association, 56,006 Chinese-made cars were sold in September, of which 6.9% were exported to other markets. Tesla said last month to raise the price of its Shanghai Model Y Display by 2.6% was pressured by rising material costs. According to a salesman at a Tesla store in Beijing, Model Y buyers who ordered in October will have to wait until next year to pick up the car.

Chinese EV makers posted record sales last month. BYD Ltd.

71,099 new energy vehicles and NIO sales Ltd.

and XPeng Ltd.

According to both the companies, they have delivered over 10,000 vehicles.

write to Yoko Kubota ([email protected])

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