India
India’s passenger vehicle industry is set to lose 500,000-600,000 units in production and more than $5 billion in revenue this fiscal year due to the global shortage of semiconductors, say industry executives.
Since the beginning of the financial year in April, automakers have suffered a production loss of 300,000-350,000 units till the end of October because of the shortage of the microchips that are a key component in new-age vehicles. The production loss also resulted in an abysmal festive season for the industry. While the supply scenario for chips has become better now, with Malaysia resuming supplies, vehicle makers are still expected to lose 250,000-300,000 units in the second half of this fiscal year 2022.
Market leader Maruti Suzuki is set to lose about 20% of its annual output, or 310,000 units, this fiscal year, resulting in a revenue loss of $2.2 billion (based on the net realisation of the September 2021 quarter). Suzuki Motor, the Japanese parent of the Indian market leader, has guided investors that it is set to lose 370,000 units outside of Japan.
According to Swiss brokerage, 85% of this volume loss will be for Indian operations. Maruti Suzuki had stated that the company had lost 116,000 units in the fiscal second quarter due to the shortage of chips.
Mahindra & Mahindra suffered a production loss of around 32,000 units in the September quarter due to the chip shortage. As a result, the auto industry was sitting on its lowest inventory, enough to meet less than two weeks’ deliveries, ahead of the peak festivities as against the usual six weeks. As the season concluded, the industry had more than half a million customers waiting for the cars and SUVs they had booked.
Source: The Economic Times
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