Chip shortages and electricity bottlenecks: car sales in China are falling sharply

In China, almost 20 percent fewer cars were sold in September than a year ago. In the largest car market in the world, models with internal combustion engines in particular are less and less in demand.

Auto sales in China declined for the fifth consecutive month in September due to semiconductor device shortages. The companies sold 19.6 percent fewer vehicles than a year ago, as the industry association CAAM announced. A total of 2.07 million cars were delivered. China is the largest auto market in the world. Last year around 20 million cars were sold here. September and October are usually busy months in China.

Burners are particularly affected

The downward trend was primarily for combustion cars in September. Sales of vehicles with alternative drives – including electric cars, plug-in hybrids and fuel cell vehicles – doubled to 357,000 units. The US manufacturer Tesla alone sold 56,006 Chinese-made cars, more than ever since the plant in Shanghai opened about two years ago. The Chinese electric car manufacturers Nio and Xpeng as well as Volkswagen each delivered more than 10,000 electric cars.

Chip factories paralyzed by pandemic

One of the reasons for the decline in car sales in China is that there are currently too few microchips on the world market. This means that fewer cars can be built. The chip shortage has to do with the Covid-19 pandemic – in several countries in Southeast Asia where semiconductors are manufactured, there have recently been many rising corona numbers. Many factories had to stop production due to strict Covid measures, including in Malaysia. In the meantime, however, the supply of chips has improved again, according to the CAAM.

Container and electricity bottlenecks

In addition, a shortage of containers in shipping has disrupted global supply chains. Deliveries often arrive late and have also become significantly more expensive. The fact that the electricity is repeatedly switched off in parts of China is also likely to have slowed down car production in the People’s Republic. Factories have to temporarily shut down because there is currently too little coal in China. Much of the electricity in the People’s Republic is still generated with coal-fired power plants.