The auto industry is struggling to keep up the production as per the market demand owing to a major semiconductor shortage. Increased demand for cars and electronic gadgets is widening the gap.
Mumbai
A global shortage of automotive embedded electronics has disrupted production in the auto industry. Due to the COVID-19 pandemic, the demand for gadgets and consumer electronics has increased. Also, people are opting for private transport over public transport.
Presently, most car models use multiple semiconductors for their infotainment systems, GPS systems, digital speedometer displays, transmission systems, airbags, wipers and other such processes and add-ons. This has resulted in an increased demand for semiconductors in the automotive industry. The more expensive a car is, the more semiconductors it needs.
The lack of huge inventories and the sudden demand for these semiconductors have led to a shortage.
According to Rajesh Goel, Senior Vice-President and Director, Marketing and Sales, Honda Cars India, the lack of semiconductors, procurement issues and logistic disruptions are impacting the industry. He added that the brand is working hard to minimise the impact of these in their production process.
Ford India, recently, halted its production process because of the lack of semiconductors. A spokesperson from the company mentioned that they expect the shortage to continue for the first half of 2021.
Toyota Kirloskar Motors is sailing through the situation without much impact as it could source semiconductors from the parent company in Japan.
Apart from the automotive industry, semiconductors are largely used in the production of computers, gaming consoles and other gadgets. The supply of semiconductors is expected to get stable by the Q2 of 2021.
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