SHANGHAI – Few global automakers, scrambling to secure tight microchip supplies for assembly plants back home, have bothered to provide an update on how the chip shortfall has impacted their China production so far this year.
But information disclosed by their local partners indicates that the severe chip shortfall has taken a heavier toll on foreign brands than domestic marques in China.
The two biggest U.S. automakers – General Motors and Ford Motor Co. – appear to be hit hard, according to production data released by their joint venture partners.
While light-vehicle output industrywide fell in May after 13 consecutive monthly gains, production at the two U.S. automakers’ main joint ventures has continued to decline since April.
Last month, output at SAIC-GM, GM’s joint venture with SAIC Motor Corp. that produces cars and light trucks for Cadillac, Buick and Chevrolet brands, tumbled 34 percent to 81,196, after slipping 28 percent in April, according to SAIC.
Production at Changan Ford, Ford’s passenger partnership with Changan Automobile Co., slumped 30 percent to 17,486 in May, after dropping 12 percent the previous month, according to Changan.
With chip supplies becoming tighter, nearly all the joint ventures operated by other global carmakers in China also fell in May.
Production at SAIC-VW -- a joint venture between Volkswagen Group and SAIC which builds cars for VW and Skoda brands -- fell 21 percent to 108,120 during the month.
At Dongfeng-Honda -- Honda Motor Co.’s partnership with Dongfeng Motor Group – factory output plunged 36 percent to 45,443.
In stark contrast, production at most major Chinese automakers has fared better, and even jumped, despite the chip shortage.
Most notable are Changan Automobile Co., the largest state-owned carmaker, and Great Wall Motor Co., a major private light truck manufacturer.
May production at Changan rose 6.2 percent to 90,283 while output at Great Wall gained 0.8 percent to 80,950, according to data released by the two companies.
With relatively stable chip supplies, Chinese brands raised their share of the domestic light-vehicle market to 41.6 percent in the first five months, up 4.5 percentage points from a year earlier, according to the China Association of Automobile Manufacturers.
China’s auto industry relies on imports for 90 percent of its chip supply, according to the industry trade group’s estimates.
Chinese carmakers appear to have reacted faster than foreign rivals when the chip shortage emerged in late 2020, said Allan Kang, an analyst in the Shanghai office of market research firm LMC Automotive.
While foreign auto manufacturers operating in China often defer to global headquarters on chip purchases, domestic automakers can negotiate deals with either existing or new chip suppliers, as needed, he added.
Zhu Huarong, Changan’s chairman, told company shareholders at a meeting in May about how Changan Ford secures chips.
According to Zhu, Ford’s corporate headquarters traditionally allocates chip resources among brands and then allows each brand to decide how to divide the allotment for different markets.
After declining 6.8 percent in May, vehicle production in China has continued to shrink this month.
With local managers scrambling to procure chips, global automakers will likely lose more market share to Chinese brands in the coming months.