Semiconductor Shortage Disrupts Chinese Car Production... "Empty Showrooms Everywhere"

China's May Auto Production Down 6.8% Year-on-Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The global semiconductor supply shortage is causing disruptions in automobile production in China as well.

On the 24th, the South China Morning Post (SCMP) reported, "The global semiconductor shortage is hindering supply in China's automobile market," noting that some car brands' dealers are struggling to find cars to display in their showrooms.

According to SCMP, a Mercedes-Benz dealership located in Beijing used to have several units of the company's new electric vehicle model, the EQC, on display, but last weekend, only one was exhibited.

The dealership's car dealer, Mr. Wi, said, "All other display cars have been sold," adding that due to the semiconductor shortage, it takes a considerable amount of time to receive vehicles after ordering.

Mr. Wi explained that for Mercedes-Benz electric vehicles, once all parts are secured, assembly takes place in Beijing. In the past, vehicles were delivered within 10 days after ordering, but now it takes at least two months.

Not only electric vehicles but also conventional cars are experiencing production disruptions due to the semiconductor supply shortage.

According to China's Ministry of Industry and Information Technology, automobile production in China in May this year was 2.04 million units, a 6.8% decrease compared to the same period last year.

Additionally, automobile sales in May this year were 2.12 million units, a 3.1% decrease compared to the same period last year.

Chinese semiconductor experts predict that the semiconductor shortage will continue not only this year but also into next year.

Experts believe that this semiconductor shortage is a result of the combination of the US-China technology war and the COVID-19 pandemic, making it difficult to resolve in the short term.

Market research firm IDC also estimated in a report last May that the global semiconductor market size next year will reach $522 billion, a 12.5% increase from this year, and forecasted that "supply constraints will continue next year."