China's car production may face disruptions from chip shortage- VW says

China's car production may face disruptions from chip shortage- VW says

© Reuters. FILE PHOTO: A Volkswagen electric ID car is seen during a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai © Reuters. FILE PHOTO: A Volkswagen electric ID car is seen during a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai

By Yilei Sun and Brenda Goh

BEIJING (Reuters) – Volkswagen AG (OTC:VWAGY), the biggest foreign automaker in China, on Friday said China's overall auto production could be interrupted after the COVID-19 pandemic disrupted chip supplies globally for some electronic components.

The pandemic has hit auto and auto parts production globally, and car-making in China, the world's biggest auto market, relies heavily on imported chips for electronic parts such as electronic control units and electronic stability programmes.

"The chip supply for certain automotive electronic components has been affected due to uncertainties caused by the pandemic," a Volkswagen (DE:VOWG_p) representative told Reuters in an emailed statement.

"This has led to a potential interruption in automotive production, with the situation getting more critical as demand has risen due to the full speed recovery of the Chinese market," the statement, which refers to China's overall auto production and not specifically Volkswagen's, said.

Volkswagen also said it was closely monitoring the situation, and had already started coordinating with its HQ and suppliers to take appropriate countermeasures.

The Wolfsburg-based company has local joint ventures with SAIC Motor Corp Ltd, China FAW Group Corp Ltd and Anhui Jianghuai Automobile Group Corp Ltd (JAC).

Original Article

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