Semiconductor chips in short supply could hamper passenger vehicles sales volumes

There has been an acute shortage of semiconductors in the global supply chain and it has begun giving passenger vehicles manufacturers a stuttered start, thereby affecting the production of automobiles.

The waning of the Covid-19 pandemic had fueled hopes for the passenger vehicles industry, but the joy could be short-lived if a study is any pointer. The concern comes about owing to fears that the shortage in semiconductor supplies have been turning real all of a sudden.

Semiconductor chips are critical in the production of internal combustion engines. Also, these electronic components, or chips as they are known, find their place in all kinds of sensors and controls found in any vehicle on the road as of now,

It is being foreseen that the semiconductor supply shortage might seriously hurt sales volumes of passenger vehicles sale this month. There has been an acute shortage of semiconductors in the global supply chain and it has begun giving passenger vehicles manufacturers a stuttered start, thereby affecting the production of automobiles.

OEMs slow down production on semiconductor chips shortage

As of now, the shortage is making original equipment manufacturers go slow in production. This could continue and, most probably, the slowdown would lead to an extension of the waiting periods of many models. These could include all, such as popular, feature-rich and high-end models too.

You May Like This

An ET report quoting an India Ratings and Research (Ind-Ra) study said that the shortage in semiconductor chips supplies would pull down sales volumes of passenger vehicles for the month of September.

The festival season demand for passenger vehicles had soared last month, mainly due to the Onam shopping spree in Kerala. With the chances of educational institutions, business houses and government offices also in the pipeline, demand is expected to peak. But then the supply would be hampered if the shortage in chips continue.

Demand for passenger vehicles have been high, but on a sequential basis, sales and productions volumes declined 12 per cent and 21 per cent, respectively, in August 2021. This is attributed to the short supply of semiconductor chips. However, in comparison with the same period of last fiscal, volumes were higher, and this hints at recovery to pre-Covid levels, the report added.

Back to top button