China’s auto sales likely to decline by 2Mn units amid chip shortages

China’s auto sales likely to decline by 2Mn units amid chip shortages

An official from China’s machinery industry federation has indicated that the country's car production would likely be down by around 2 million units on the back of ongoing chip shortage.

According to credible sources, the executive vice president of China Machinery Industry Federation (CMIF) says that special raw materials, software, precision instrumentation, and industrial sensors that depend on imports would also be hampered due to man-made misfortune and natural calamities.

Reportedly, China's auto production and sales fell for five months straight between May to September. Chip shortage is also expected to harm other sectors in China like home appliances, computers, and mobile manufacturing.

Earlier, the United States government had debarred China's major chipmaker Semiconductor Manufacturing International Corp (SMIC) over security concerns.

Following recent announcement, SMIC said that it will build a semiconductor plant in Shanghai after plans to open small semiconductor factories in Shenzhen and Beijing.

Due to the global shortage of electronic chips, it is likely that Apple could fail to meet its production target, claim sources.

Commenting on the global chip shortage, Taiwan's TSMC earlier said that it is working to overcome the global semiconductor shortage and is taking unanticipated actions.

Additionally, Gina Raimondo, US commerce secretary, stated that it's time to look into the shortage aggressively. However, Raimondo further added that there is no fast and easy fix, while notifying that the problem may divulge into next year.

Automotive sales were hit severely in China in September. Toyota Motor says that its China sales dropped to 35.9% from a year earlier to 115,000 vehicles owing to the shortage of semiconductors and other major components owing to the spread of COVID-19 infections in Southeast Asia.

Similarly, Honda Motor Co. said its sales in China fell by 28.1%, while Nissan Motor Co. claims on seeing a 26.2% drop in sales.