Vehicle makers seem headed for a tight spot as the global semiconductor shortage continues to have an acute impact on output across the industry. Wholesale despatches from the automakers’ factory gates to the dealers in August were a mixed bag. While passenger vehicles (PVs) registered a year-on-year growth of 7.5%, two-wheeler sales dropped by 14.6%, showed data released by Siam on Friday. The three wheeler segment,how- ever, registered an impressive 59.7% growth, courtesy the low-base effect cou- pled with lifting of lockdowns in states.
The overall wholesales recorded a 11.4% decline, according to the data by Society of Indian Automobile Manufac- turers (Siam). & Mahindra announcing production cuts. The analysts predict the September whole- sales could witness a more significant drop. Motilal Oswal Financial Services said in a note, August 2021 felt the heat of semi- conductor shortage, which is expected to worsen next month. PVs’ sustained demand resulted in volume growth, but was restricted largely by the semiconductor shortage.With the decrease in produc- tion at major OEMs due to the shortage, September wholesales could see a significant decline despite strong demand and new launches, it added.
Rajesh Menon, director-general, Siam said: “The Indian automobile industry is reeling under pressure due to supply chain challenges. The global semiconductor shortage continues and now it is having an acute impact on output across the auto industry. In addition, high commodity prices are increasing the cost of produc- tion.Against such strong headwinds,Siam members are working hard to meet cus- tomers’ demand and expectations while ensuring safety of its people across the value chain.”
Analysts tracking the sector had factored in the likely trend of dull wholesales in their forecasts, with majors such as Maruti Suzuki, Tata Motors and Mahindra. Looking at the cumulative sales from April to August 2021, the passenger vehicle segment was still below the 2016-17 level, the two-wheeler segment lower than the 2011-12 level, and the three-wheeler seg- ment behind by many years, Menon added. Releasing its sales data, Maruti Suzuki had said the sales volumes of the company in August were affected due to electronic components shortage and the company took all possible measures to limit the adverse impact.
Tata Motors had also said semiconductor shortage continues to impact the auto industry globally.The recent lockdowns in east Asia have worsened the supply situation and so Tata Motors was forced to moderate production and offtake volumes in the coming months. “The situation is fluid and we will continue to work to mitigate the impact of this and aim to meet our customer orders through an agile, multi-pronged approach, including close engagement with our extended supply chain partners, procuring chipsets from the open market, using alternate chips and managing our model and trim mix,” it had said.
Auto dealers body Fada on Tuesday said retail sales during the festival season are going to be lacklustre because the shortage of semiconductors has slowed down the supply of popular models, especially in the PVs segment.
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