Automakers have pending backlog of over seven lakh orders as of December: Survey

Automakers in the country have a backlog of more than seven lakh orders as of December 2021 due to the the shortage of semiconductors, as per the Economic Survey. Due to the supply constraints, the average lead time for the industry for 2021 has been around 14 weeks globally. Lead time is the difference between the date of order and actually receiving the vehicle.

India too has experienced similar trends in the automobile sector, as per the survey. As per data from the Society of Indian Automobile Manufacturers (SIAM), carmakers in the country sold 2,19,421 passenger vehicles in the domestic market in December, down 13 per cent (year-on-year). "This is not a demand problem but a supply-side issue. The information from various car manufacturers' websites reveals a cumulative pendency of over 7 lakh orders as of December 2021," the Survey stated.

The Survey also highlighted the efforts of the government in trying to boost semiconductor production in the country so as to avoid any future supply-chain shortage. An outlay of ₹76,000 crore has been approved for the development of semiconductors and display manufacturing ecosystem in the country. The effort to boost this industry comes at a time when the global economy is facing a shortage of semiconductors due to severe disruptions in supply chains.

The PLI and other schemes that focus on boosting semiconductors will not only help domestic auto companies to overcome the challenges posed by the coronavirus pandemic but will also assist them to become globally competitive, especially in chip making, the Survey stated.

Shortage of the components led several companies from various industries to either shut factories or curtail production. Semiconductors are used in automobiles and its components, as well as electronic and medical devices.