Electronics

On October 22, according to foreign media reports, three people familiar with the matter revealed that due to the global shortage of semiconductor chips, the French car manufacturer Renault's car production this year is expected to reduce by at least 300,000 vehicles, which is far more than previous estimates.

From brake sensors to power steering to infotainment systems, chips are widely used in various fields. The shortage of chips has caused global automakers to cut or even suspend production, and new car prices have also risen.

In early September, Renault predicted that the shortage of chips would cause the company to lose 220,000 car production this year. According to the latest forecast, the company's output loss may be one-third more than the September forecast.

A person familiar with the matter said, "Renault's forecast has been changing, but this year's production reduction will be between 300,000 and 400,000 vehicles." This will account for at least 8% of Renault's total vehicle production (3.75 million vehicles) in 2019. Two other people familiar with the matter said that Renault's production cut may be between 350,000 and 380,000.

Stifel analyst Pierre-Yves Quemener said that if Renault's production cut this year can be controlled at 350,000, it would be an "achievement" for the company. He said: "This will mean that Renault will significantly improve the current situation in the fourth quarter. In my opinion, this is very, very ambitious."

As of 13:47 GMT, Renault's share price has fallen by about 4%, while Renault's competitors Volkswagen, BMW and Stellattis have fallen between 1% and 4%, and these three companies have also been forced to reduce production. A Renault spokesperson declined to comment.

On October 19, the automobile industry organization PFA stated that the timing of the chip crisis may be the worst, when automakers are recovering from the new crown epidemic and are beginning to transform to electric vehicles. The organization also said that the chip supply shortage may continue into 2022. An information consulting company headquartered in London said that the shortage of chips may cause global automakers to reduce production of 11 million cars this year.

Malaysia is a global chip supply center. Electronics companies in the region said that suppliers who supply chips to automobile and electronic product manufacturers hope to reach long-term agreements. If necessary, they are willing to pay higher prices.

All cars produced in the EU this year must comply with EU regulations, that is, the average carbon dioxide emissions of new cars must not exceed 95 g/km, otherwise they will face high fines. Renault said that by 2030, electric vehicles will account for 90% of its Renault brand sales.

Renault is scheduled to announce its third-quarter results on October 22.