AutoBeta(AutoBeta.net)09/11 Report--

On September 10, the State Administration of Market Supervision and Administration issued an official announcement of "administrative penalties for three automotive chip distribution companies to bid up prices in accordance with the law." The notice pointed out that according to law, the General Administration of Market Supervision imposed a fine of 2.5 million yuan on three automotive chip distribution enterprises, namely, Shanghai Jite Electronics Co., Ltd., Shanghai Chengsheng Industrial Co., Ltd., and Shenzhen Yuchang Technology Co., Ltd.

According to the General Administration, three automotive chip distributors, Shanghai Xite, Shanghai Chengsheng and Shenzhen Yuchang, have substantially increased their prices to sell some automotive chips, such as chips with a purchase price of less than 10 yuan, which are sold at a high price of more than 400 yuan, an increase of 40 times. Under the condition of balanced supply and demand, the price increase rate of automotive chip traders is generally 7%. 10%. The above-mentioned enterprises take advantage of the imbalance between supply and demand of domestic automotive chips and substantially increase the price of chips when the purchase price is basically stable. Downstream auto parts enterprises face the risk of compensation for breach of contract because there is no core available. This kind of behavior aggravates the imbalance between supply and demand, creates tension and disturbs the price order of the market.

As we all know, automotive chips are important components in the automobile manufacturing industry. An ordinary car needs more than 200 chips, while new energy vehicles need at least 500 chips. Under the background that the global epidemic situation has been effectively controlled, and with the rapid development of new energy vehicles, the demand of automobile companies for chips has increased significantly. However, since the end of 2020, global car companies have been forced to stop or cut production because of the shortage of chips, which has led to a sharp decline in production, including Volkswagen, Toyota, Nissan, Ford and so on.

China, as the world's largest automobile market and new energy vehicle market, is the first country to recover from the epidemic. In order to reduce the impact of the epidemic on annual production and marketing targets, many car companies are also increasing their investment and planning in the Chinese market. However, the environment in overseas markets is not optimistic, the prevention and control of the epidemic continues to affect the production of chips, and the demand for chips in China's auto market continues to be tight, especially due to the spread caused by the prevention and control of the epidemic in Malaysia. Malaysia is a major chip producer, further aggravating the supply of chips in China and even around the world. Retail sales of narrow-sense passenger cars in China fell 14.8 per cent year-on-year to 1.451 million in August, down from 1.502 million in July, and the year-on-year decline widened to double digits, according to the Federation of passengers. In terms of annual sales, based on the impact of last year's epidemic, cumulative sales from January to August in 2021 can still achieve 17.1% year-on-year growth, but this growth figure is shrinking due to chip supply problems, and the possibility of annual sales leveling off with last year's is not ruled out. From the perspective of car sales, such as FAW-Volkswagen, SAIC-Volkswagen, SAIC-GM, Dongfeng Honda and other car companies have seen a sharp decline in sales, the impact of chips on car companies can be imagined.

In this context, it is also expected that some dealers bid up prices to make a profit. Cui Dongshu, secretary general of the Federation of passengers, pointed out that the antitrust investigation carried out by the relevant state departments on chips is conducive to improving the order of chip supply and accumulating the delivery of retail orders. He believes that the impact of the chip shortage on the car market will be gradually alleviated from late September, and the domestic car market is expected to pick up in the fourth quarter.

Some people related to automobile companies said that the basic reason for the "lack of core" is that the supply of chips is basically cut off because of the overseas epidemic, so on the basis of controlling the price stability of the domestic chip supply market, how to ensure the upstream supply is the key. Some experts believe that after encountering the problem of lack of core, it is the key to strengthen the chip autonomy rate to better deal with the phenomenon of chip neck jam in the future.

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