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CCTV Script 07/09/21

— This is the script of CNBC's news report for China's CCTV on September 7, 2021, Tuesday.

Almost all the automakers appearing at this year's Munich Auto Show, be it Volkswagen, Daimler or BMW, are more or less facing a shortage of semiconductor chips or some other raw materials. The surge of Covid-19 infections in Southeast Asia has brought new challenges to the carmakers who had previously hoped that the supply bottleneck could ease this summer.

Herbert Diess 

Volkswagen CEO 

"We were expecting and hopefully that after summer break, we should have better supply. But then Malaysia where the back end of semiconductor manufacturing mostly happens for most of our suppliers was hit hard. Situation is improving. And hopefully towards the end of the month. We should be better already and then recover. "

Supply bottlenecks are having a direct impact on car production and sales. In August, Ford's new car sales dropped 33.1% from a year ago. In the same month, U.S. auto sales plummeted to an adjusted selling rate of 13.09 million vehicles, according to auto data firm Motor Intelligence. That's the worst pace since June 2020, retreating from the peak in April. Meanwhile, many companies have announced plans to cut production in September. Japanese auto giant Toyota will cut global production by 40% this month, while Maruti Suzuki, the largest auto manufacturer in India, is planning to slash 60%. Daimler expects to see a significant sales drop for its brand Mercedes-Benz in the third quarter.

Ola Källenius 

Daimler CEO  

"We hope that q3 is to through that seems to be the quarter that will be most significantly affected by this and some of the shutdowns due to COVID that we saw in Malaysia and in other places. And we hope that in the fourth quarter that we will start coming back up again. But there is a level of uncertainty that we have to deal with in our production system. It needs to stay flexible. "。

While production is constrained, inventory in the United States is also sitting around record lows. According to data provided by J.D. Power,  American dealers only have less than a million vehicles in inventory for retail sale, about two-thirds less than pre-pandemic levels.

 Fewer promotion and higher prices have also dampened consumers' interest to buy cars at the moment. Morgan Stanley recently lowered the U.S. third-quarter GDP forecast to 2.9% from 6.5%, citing concerns of reduced spending on durable goods including cars.

The supply situation in most countries is gradually improving. Most auto companies attending this year's show believe that the worst days of supply shortage will soon pass. However, the CEO of Volkswagen told us that he expects the overall shortage for semiconductors to last for a few years "because the Internet of Things is growing so fast". With the pandemic still raging, there is still a high level of uncertainty in the supply chains.

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