(Yicai Global) March 9 -- The shortage of automotive chips will not have too much of an impact on the industry at present as Chinese firms steadily boost semiconductor production, according to the China Passenger Car Association said.

The Ministry of Industry and Information Technology and electronics companies have taken steps to mitigate the chip shortage, the CPCA said in a Chinese market analysis report released today, adding that the supply issue will be gradually resolved.

The supply of auto chips with extremely mature technology has been boosted under this rare opportunity, the report said. As China’s domestic chip production gradually recovers, the shortage of chips will not affect car sales much, it added.

The world has been grappling with a scarcity of automotive chips since the second half of last year amid the Covid-19 pandemic. A white paper by consultants IHS Markit predicted that the shortage would lead to a global production cut of 1 million vehicles this quarter, with the shortfall continuing into the third quarter.

The MIIT held a meeting on Feb. 9 with representatives from chip suppliers who said that they had taken measures to boost supply capacity by setting up special working groups, strengthening communication with auto parts makers, activating spare capacity, and accelerating logistics and transportation.

The MIIT said chip suppliers should attach great importance to the Chinese market, hike capacity allocation, improve circulation efficiency, and strengthen collaboration with upstream and downstream businesses to ease the shortage.

Retail prices of vehicles are relatively stable, and there is no obvious trend toward higher prices for the key models, which reflects the strong ability of manufacturers and dealers to respond to the inventory crisis, the CPCA’s report added.

Editor: Peter Thomas