Why CHIP SHORTAGE makes Chinese car companies feel extremely panic?

After Huawei was cut off by the US chip supply last year, the chip shortage issue has officially entered the public's view and has impacted the automotive industry.

The Chinese auto market size is 28 million units per year, accounting for more than one-third of the global market, however, the output value of China's automotive chips accounts for less than 5% of the world.
In recent years, with the promotion of smart cars, the use of automotive chips has increased day by day. An intelligent new energy vehicle has hundreds of chips, and in key chip areas such as sensing, control, computing, communication, storage, security, and power products, etc., all Chinese car companies use foreign chips, and 80%-98% of key components such as MCUs are imported.

According to the China Business Network on April 23, the Great Wall Motor Factory's two production bases in Yongchuan and Xushui, China, will stop production due to chip shortage. The production stoppage in May and June will affect numerous popular models, including the Haval H6, Great Wall Cannon, and Tank 300.

These models performed well in the Chinese market. For example, the Haval brand sold about 222,700 units in the first quarter, of which the Haval H6 sold about 112,900 units, accounting for 50% of the total.

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