CAAM urges cooperation to build resilient auto supply chain

Carmakers, suppliers and governments should work together to build a new type of supply chain and promote the high-quality development of China's auto industry, said a leading industry expert.

Fu Bingfeng, secretary-general of the China Association of Automobile Manufacturers, said China has a relatively complete supply chain but it has been affected due to factors including the COVID-19 and price hikes in raw materials.

He made the remarks at the China Auto Supply Chain Conference held in late June. Fu said disruptions to the supply chain caused the huge manufacturing system to suspend operations.

Fu took the number of chips required in an Audi sedan for an example. There were only a few dozen electronic control units in the early variants produced in the mid-1990s but not it requires thousands.

This is why a chip shortage can have such a huge effect on the global auto industry, Fu said. Statistics show that car production has been slashed by millions because of chip shortages since late 2020.

Besides this, the prices of raw materials for batteries have soared this year, creating a situation where carmakers had to increase vehicle prices.

The pricing system should depend on the supply and demand between carmakers and customers, not upstream materials, said Fu.

Policies will play a critical role in the future construction of the industrial supply chain, Fu said.

Guo Shougang, a deputy director at the Ministry of Industry and Information Technology, said at the conference that the MIIT will focus on improving the weak links in the industrial supply chain, improving supply chain management and building a new intelligent ecology.