Shanghai (ZXZC)- Great Wall Motor (GWM) announced on April 25 it has no plans to stop outputs at the car manufacturing plants in Yongchuan and Xushui, as an official denial of the a local report saying it would halt production at the two plants in May and June due to the chip shortage.

However, the automaker confirmed that the chip constraints have to some degree affected its production. To address this issue, it will take positive steps to soften the impact, including procuring chips worldwide and strengthening supply chain management.

A local media outlet said a few days ago that GWM was risking halting production at Yongchuan and Xushui plants in May and June because of the chip shortage. The models to be involved include such hotter-selling products as the Haval H6, the Great Wall POER pickup, and the TANK 300, according to the person with knowledge of the matter, without specifying the volume of vehicles affected.

Great Wall Motor's Haval booth at Auto Shanghai 2021; photo credit: Great Wall Motor

At the Auto Shanghai 2021, GWM's booth grabbed the attention of many viewers with multiple new models. The rapid expansion of product matrix also requires a substantial increase in production capacity, which is under the threat of chip supply constraints.

The automaker has already seen 90% of its models feature Level 2 automated driving functions. According to its planning, from 2021 onwards, all new models will be equipped with IoV (Internet of Vehicles) functions, indicating a greater demand of chips in the future.

Regarding the deployment in chip area, GWM announced in early February the strategic investment in Chinese AI chip designer Horizon Robotics. Besides, two parties also signed a framework agreement to co-explore and develop technologies and products related to auto intelligence and connectivity with ADAS (advanced driver assistance system), high-level driving automation and intelligent cockpit as focuses.

Some industry insiders considered that GWM's strategic investment in the chip developer might link to the dearth of chips. On the other hands, the software is playing an increasingly important role in today's competition among automakers.