Semiconductor crisis eclipses PV car sales in Nov

In spite of robust demand, passenger vehicle (PV) sales in November remained subdued as semiconductor shortage continued to cripple production for manufacturers. On the brighter side though, with supply-side issues easing month-on-month, the worst seems to be behind, observe industry executives. Overall, PV car sales during the month dropped 14% to 286,000 units, compared with 246,000 units a year ago, as per the industry estimates.

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“While the situation still remains dynamic due to the ongoing supply side challenges, the company is making all possible efforts to maintain a steady delivery pace and catering to the market demand effectively,” Honda Cars India Senior Vice-President and Director (Marketing and Sales) Rajesh Goel commented.

The global semiconductor supply constraint is not only affecting PV car sales. It is impacting the production of many electronic equipment types in 2021. The crisis germinated due to capacity constraints and shortages for substrates, wire bonding, passives, materials, and testing, all of which are parts of the supply chain beyond chip fabs. A report by think tank Gartner suggests four key actions to mitigate risk and revenue loss during the global chip shortage: (i) extending supply chain visibility; (ii) guaranteeing supply with companion model and/or pre-investments; (iii) tracking leading indicators; and (iv) diversifying supplier base.

To handle this situation, Indian government is planning to come up with a semiconductor design linked incentive policy which envisages financial and infrastructure support for Indian MSMEs and startups right through the ideation stage to production stage. This policy will boost domestic manufacturing of chip sets and inflow of foreign investment.

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Sources: Business Standard, Zee News, ET