A global chip shortage will continue to hurt Chinese automakers in 2022, Chen Yudong, the China head of German auto supplier Bosch, said on Wednesday.
Why it matters: The ongoing global chip shortage has hit Chinese automakers hard. In September, the country’s auto sales fell 19.6% year-on-year to 2.06 million vehicles, the biggest monthly drop this year. Several Chinese electric car makers, including Nio and Li Auto, have slashed their quarterly production forecasts.
Details: Currently, Bosch China can only fulfill 50% of the market demand in China as a result of the chip shortage, an improvement from July when it could only meet 20% of the demand from clients, Chen said during a media briefing in Shanghai.
- Chen estimated that the firm’s supply in China will remain “very low” over the remaining three months of 2021, without providing further details. Chen added that although the chip supply situation may improve over time, Bosch China’s supply will still be 10% to 20% lower than the market demand by the end of next year.
- The chip shortage has disrupted automakers’ production since the second half of last year, Chen said, pledging that the company will boost domestic chip manufacturing to mitigate the impact.
Context: Bosch is the world’s largest auto parts supplier. The company supplies 70% of China’s electronic brake control systems, Chinese media Yicai reported last month.
- Chinese automakers have been hit by the supply chain constraint, with Li Auto recently cutting its delivery forecast from up to 26,000 vehicles to 24,500 units for the third quarter. Nio made a similar move in September, cutting the upper end of its Q3 delivery outlook by 1,500 vehicles to 23,500 units.
- Consulting firm AlixPartners estimated last month a loss of $210 billion in revenue in 2021 for the global auto industry due to the chip shortage, almost doubling its previous projection in May.