AutoBeta(AutoBeta.net)04/25 Report--

On April 25, Great Wall issued a clarification notice saying that Great Wall Motor has no plans to stop production at its two major production bases in Chongqing and Xushui. Great Wall Motor is currently facing a shortage of chips, and factory production has been affected to a certain extent, but none of them has stopped production. In view of the tight supply in the chip market, the company is actively taking a variety of measures to deal with it, including actively purchasing chips worldwide and strengthening supply chain management, so as to alleviate the impact of chip supply shortage.

On April 24, several media reported that Great Wall encountered production bottlenecks due to chip supply shortages, and two major production bases in Yongchuan and Xushui in Chongqing faced production stoppage in May and June, affecting a number of popular models, including Harvard H6, Great Wall Gun, Tank 300 and so on.

Data show that the Great Wall Xushui Base is the largest independent brand production base in China, with a total planning area of 13 million square meters, a total investment of more than 30 billion yuan, and a planned annual production capacity of 1 million vehicles. The models produced by Xushui base include Harvard H6 Coupe, Harvard H8, Harvard H9, Harvard H2 and Harvard H7, Harvard H6, WEY VV5, Harvard H4 and so on. Great Wall Yongchuan Base is the fourth vehicle base of Great Wall Automobile in China, with an investment of 8 billion yuan and a planned annual production capacity of 250000 vehicles, mainly producing Great Wall Gun series pickup trucks, Harvard H9, tanks and other models.

On April 21, Great Wall Motor released its first-quarter results, showing that its operating income in the first quarter of 2021 was 31.117 billion yuan, an increase of 150.62 percent over the same period last year, and the net profit of shareholders belonging to listed companies was 1.639 billion yuan, turning losses into profits. However, the net worth of Great Wall Motor has declined, and the net cash flow from operating activities has also fallen to 213 million yuan from 524 million yuan last year. Industry analysts said that it is the chip shortage that has led to a certain increase in the price of raw materials, while the rapid rise in the price of raw materials upstream has suppressed the net profit of Great Wall to a certain extent. As far as the current situation is concerned, the rapid rise in raw material prices and chip shortages will still have some impact on the future.

Chip outage has become a global industry problem, which has had a certain impact on global automakers, and has gradually affected the domestic market. Judging from Great Wall's response, the chip supply problem has affected its production, but it is not serious enough to stop production.

However, from the perspective of the global market, the chip supply problem is far more serious than expected. Since Volkswagen stopped production in December last year because of a shortage of ESP chips from the mainland and Bosch, the problem of "lack of core" has affected Volvo, General Motors, Ford, Toyota, Honda, Nissan and many other companies. Not long ago, the production capacity of new car-building forces, such as Lulai Motor, was also limited due to lack of cores, and it was announced that production would be suspended for five days.

Pat Gersingh, CEO of US chipmaker Intel, said the global chip shortage could last for another two years, according to CCTV Finance. "We estimate that it may take two years for the entire industry to solve this problem because it takes some time to build an assembly line or wafer factory," Mr Gerzinger said at the Barron round table. "

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