SHANGHAI – While curbing auto sales globally, the severe semiconductor chip crunch and lingering coronavirus outbreaks worldwide have created a rare opportunity for Chinese carmakers to pad market share gains and boost exports.
The chip shortage started to affect auto production in China in late December and domestic brands have been on a steady roll ever since.
Chinese automotive brands boosted their collective share of the domestic light-vehicle market to 43.3 percent in the first three quarters of the year, up 6.7 percentage points from the same period in 2020.
The trend has accelerated. In September, China’s light-vehicle market contracted for the fifth straight month, slumping 17 percent to 1.75 million. But sales of domestic brands continued to grow, rising 3.7 percent to some 821,000.
As a result, the combined market share of domestic automakers rose 9.1 percentage points from a year earlier to 46.9 percent last month.
China’s automakers have proved far more flexible in adapting to and managing the chip shortage, according to Xi Zhongmin, vice president of GAC Aion New Energy Vehicle Co. He spoke at an auto industry conference in the east China city of Nanjing last week. GAC Aion is an electric-vehicle subsidiary of state-owned automaker GAC Motor Co.
While foreign automakers producing vehicles in China often have to wait for management at a headquarters elsewhere for how best to prioritize and navigate the chip shortage, Chinese automakers have proven more adept at securing alternative chip suppliers, according to Xi’s observation.
Once a new supplier passes certification, the chips can be quickly shipped and installed, he noted, drawing on the experience of GAC Aion New Energy Vehicle.
In addition, some domestic Chinese brands are willing to pay higher prices to purchase chips to meet urgent needs, he said, without identifying the brands.
China is now probably the only country adhering to what is known as “zero tolerance” to help manage coronavirus infections.
The Chinese government moves quick to lock down regions where local infections have been detected to prevent the spread of the virus.
The draconian measure can temporarily stymie local economic activity but allows the government to effectively contain outbreaks.
With a flexible approach to securing chips and an environment largely free of coronavirus infections, Chinese automakers have also ramped up exports to markets where chip shortages and the viral outbreak continue to disrupt vehicle production and sales.
In September, China’s light-vehicle exports jumped 78 percent to around 135,000, with year-to-date volume spiking 130 percent to 1.06 million, according to the China Association of Automobile Manufacturers.
In the first nine months, Chery Automobile Co., China’s largest car exporter, shipped nearly 190,000 vehicles to countries such as Russia, Brazil and Chile. The number represents an increase of 155 percent from a year earlier.
With neither the global chip crunch nor the pandemic expected to end in the near future, Chinese carmakers are poised to further expand their footprint at home and abroad.
