Automotive chip supply will to improve, and Chinese auto production and sales will continue to strengthen in the coming months, said Cui Dongshu.

Darkest days of auto chip shortage are over, says CPCA secretary-general-CnEVPost

The darkest days of auto chip supply have passed, with production and sales expected to continue to strengthen in China in the coming months, Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), said in an article Saturday.

China's passenger car production in September was 1.72 million units, down 15 percent from a year earlier and up 16 percent from August, an improving trend, Cui noted.

Looking at the CPCA's weekly tracking data, wholesale sales improved significantly in the last week of September, while retail sales remained weak, the article said.

However, looking at the data for the first 10 days of October, the performance of retail sales has improved significantly, Cui said.

He believes that the chip supply in October will be significantly better than in September. The biggest obstacle to increased automotive chip supply at the moment is the shortage of core components brought about by Covid-19 in Malaysia, but efforts have been made recently to secure a recovery in production in Malaysia, Cui said.

"With the improvement of the Covid-19 overseas, coupled with the promise of increased production from TSMC, although not very credible, I remain optimistic and confident that the darkest hour for automotive chip supply is over and will continue to improve in the future," Cui said.

However, the chip shortage problem will not be completely eliminated until after the Chinese New Year sales peak next year, he said.

The day before Cui's article was published, TF Securities analysts Yu Te and Lu Jiamin also mentioned in a report on Thursday that wholesale sales of Chinese car companies had started to increase significantly in late September, possibly indicating that the worst moment of the auto chip shortage has passed.

TF Securities said data from the CPCA showed that wholesale sales had started to strengthen in late September.

As chip supply gradually improves in the next 3-5 months, China's auto industry is expected to enter the inventory-raising phase, and manufacturers' production and wholesale sales are expected to gradually pick up, TF Securities said.

Analysts say worst moment of auto chip shortage in China has passed

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