- Thursday, January 02, 2025
By: Shubham Ghosh
SHORTAGE of semiconductor chips globally is affecting automobile production and may hit the August-September wholesales, even as demand is witnessing a steady recovery from the second wave of the coronavirus pandemic, a report on Tuesday (31) said.
New York-based financial firm Jefferies said in its report that in August, registration of passenger vehicles and tractors saw an uptick of 41-44 per cent over the corresponding month of 2019. Truck resignations are also getting better despite a 15 per cent fall in the months over August 2019.
But when it came to two-wheeler registrations, August saw a 19 per cent fall over the same period of 2019, the report added.
Noting that shortage of chips is impacting production and should hut the August-September wholesales, Jefferies said, “Companies such as Maruti, Bajaj and Royal Enfield have seen an increased impact in the September quarter.”
The report also added that the recent pandemic-related lockdown in Malaysia might add to the constraints.
Semiconductors are silicon chips that cater to control and memory functions in products including automobiles, computers and mobile phones and other electronic items.
The auto industry has particularly seen a boom in the usage of semiconductors in recent times with new models coming up with more and more electronic features like Bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.
Shortage of the key component has been affecting the automotive industry across the globe along with other industries, forcing them to compromise on production.
Industry experts feel an enhanced demand for automobiles in the past few months has put pressure on the global supply chains, causing the shortage.
India’s largest carmaker Maruti Suzuki India on Tuesday said it expects its total vehicle production in the month of September across plants in the states of Haryana and Gujarat to be around only 40 per cent of the normal output because of shortage of semiconductors.
“Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the company is expecting an adverse impact on vehicle production in the month of September in both Haryana and its contract manufacturing company, SMG in Gujarat,” the company said in a regulatory filing.
Maruti Suzuki India had reported a 58 per cent rise in total production in July on a yearly basis to 170,719 units. Its wholesales in July month stood at 162,462 units, up 50 per cent from in July 2020.
