By Norihiko Shirouzu and Yilei Sun
SHANGHAI (Reuters) – 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.
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.
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.
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.
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.
(Reporting by Norihiko Shirouzu and Yilei Sun; Editing by Alexandra Hudson)