Visitors lining up for a hands-on experience of some popular vehicle models at Shanghai auto show Photo: Yanghui/GT

Despite of tight supply of chips, Great Wall Motor Company Ltd (GWM) announced on Sunday that its two manufacture plants have not stopped production. This came as a response to media reports on Saturday saying the company has suspended production due to lack of microchips.

According to an announcement by GWM shared with the Global Times on Sunday, the two production plants of the company based in Southwest China's Chongqing have no plan to stop production.

"GWM is currently facing the situation of tight supply of microchips and the factory production has been affected to a certain extent but has not stopped. In view of the tight supply situation in the microchip market, the company is actively taking various measures to deal with it, including purchasing chips worldwide and strengthening supply chain management to ease the tight supply," read the announcement.

Due to chip supply shortage, GWM supply chain will face constraints and the company may have a crisis, media reported on Saturday citing a person close to the company, adding that in the next two months, GWM's two production plants in Chongqing might have to close.

The company has confirmed that the news are false.

GWM showcased 22 new models at the Shanghai International Automobile Industry Exhibition (Auto Shanghai 2021) which kicked off last Monday. Many of the models are popular with consumers putting its cars under spotlight.

But according to media reports, the company stopped taking orders of some of its models last month, raising questions about GWM. The company's official position is that the vehicle delivery cycle was longer than three months and the factory was off-line for production improvement.

It is worth mentioning that the impact of the microchip shortage on the car industry continues and some affected car companies at home and abroad have been forced to stop production. 

Previously, the China Association of Automobile Manufacturers also reminded that the supply of chips and other components will continue to affect the pace of production and it is expected that the impact should be greater in the second quarter of this year.