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Lingering auto chip shortage hurts India's largest car vendor

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

Although over-supply has become an issue for the semiconductor industry, automobile chip shortage still lingers, impacting India's largest passenger vehicle vendor's ability to meet customer orders.

Business Today reported that Ajay Seth, CFO of Maruti Suzuki said that the electronics components shortage still limits their capacity, with their production volumes decreasing to only 51,000 units in the second quarter, adding that their teams are working towards maximizing the production volume from available chips, but the electronic components supply remain unpredictable.

According to DIGITIMES Asia, recent quarterly reports show that those who generate their revenues primarily from PCs, such as Intel, suffer from lukewarm demand, while the automobile and industrial chip makers, such as Renesas, still enjoy high growth in the past quarter.

Outlook India reported that according to Maruti Suzuki's estimates, there should be a backlog of about 650,000 units across the passenger vehicle market. The waiting period for Tata Motor's passenger vehicle range stretches 4-12 weeks, and the delivery period for EVs goes up to six months. Furthermore, the delivery time for Honda Cars India's products varies from 2 to 9 months, with hybrids having a waiting time of nine months.

Business Standard reported that the global chip shortage and rising raw material prices have led to price hikes for vehicles sold in India. The report cites McKinsey's analysis reported the rising price of air turbine fuel also leads to higher vehicle prices as semiconductors are transported by air.

Nikkei Asian Review citing Society of Indian Automobile Manufacturers' data, showed that India's passenger vehicle sales surged by 51 annually in the second quarter, and Maruti Suzuki sold 369,000 units, accounting for 41% of the market. However, as inflation concerns mount, it is unclear whether the rebound may continue.

India's vehicle production (thousand units)

FY

Passenger vehicle

Commercial vehicle

FY17

3,801.67

810.25

FY18

4,020.27

895.45

FY19

4,028.47

1,112.41

FY20

3,424.56

756.73

FY21

3,062.28

624.94

FY22

3,650.70

805.53

Source: SIAM, Compiled by DIGITIMES Asia, August 2022

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