Chip-short season non-festive for Indian auto firms

The ongoing global semiconductor shortage has hamstrung Indian auto firms, which are mostly reporting lower sales during the festive season. Although demand had been showing signs of revival after Covid-19 restrictions were lifted, the car dealers have been hamstrung by supply-side constraints as vehicle despatches from the factories have fallen due to the chips shortage.

Cars have become increasingly dependent on chips – for everything from computer management of engines’ fuel economy to driver-assistance features such as emergency braking. The carmakers were forced to shut down plants last year due to the Covid-19 pandemic, but they now face increasing competition from the consumer electronics industry for chip deliveries.

Shipments of passenger vehicles by Maruti Suzuki, Hyundai Motors and Mahindra and Mahindra were hit in October due to the ongoing global shortage of semiconductors. It is clear by now that the slowdown will continue for a long time.

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