Demand for microchips is at an all-time high as supplies continue to dwindle worldwide, forcing automakers to cut back on production and reduce the availability of certain features. That includes General Motors, which recently announced continued production downtime at several of its North American facilities. Now, a new report indicates that Chinese regulators are investigating possible price-gouging practices from microchip distributors.
Per a post from Reuters, the State Administration for Market Regulation (SAMR) is looking into illegal acts like price-gouging, hoarding, and collusion among a number of companies and industries.
“In response to prominent problems such as speculation and high prices in the automotive chip market, the State Administration of Market Supervision has recently filed an investigation on car chip distributors,” SAMR said in a statement.
According to Reuters, the microchip shortage has resulted in falling car sales in the Chinese market, with June figures down 12.6 percent compared to the month prior, per the China Association of Automobile of Manufacturers. Supply constraints are believed to be the root cause of the sales decline.
The ongoing microchip shortage began last December, and primarily affected the automotive industry. Now, however, the shortage has affected a wide range of industries.
In response to the microchip shortage, General Motors has cut production at numerous North American facilities, including San Luis Potosí Assembly in Mexico, Fairfax Assembly in Kansas, Lansing Grand River in Michigan, Flint Assembly in Michigan, and Fort Wayne Assembly in Indiana, among others.
General Motors has also reduced feature availability for select models, including electric power steering lock for its full-size SUVs, as well as HD radio and fuel management systems for its full-size pickups.
GM previously adopted a “build-shy” strategy wherein popular models were produced without certain key components, then stored as new microchip components were sourced. The vehicles were then completed after new components were acquired and shipped to dealers.