Dampened festive spirit, no freebies for car buyers: Blame it on chip crisis

After gradually coming out of pandemic blues, the auto industry is now duelling another battle - chip shortage. Like the rest of the auto industry around the world, the Indian auto sector too is finding difficulties in dealing with the situation. Right ahead of the festive season, the auto industry is experienced dampened spirit because of the semiconductor shortage it is facing.

The consumers too are being impacted adversely by this chip shortage. While they are being forced to wait long periods for their booked vehicles, consumers are also paying higher for the vehicles. Also, the freebies that are usually offered by the auto companies and dealers during every festive season to lure buyers have vanished this time, reports PTI.

The automobile industry currently has nearly five lakh orders awaiting deliveries, claims the report. Shashank Srivastava, Senior Executive Director (Marketing & Sales), Maruti Suzuki India, said that demand parameters reflected in booking numbers are very good, but the supply side is a little muted because of the chip shortage. "That is the reason why the number of bookings has built up but supplies have not come," he further added.

He also revealed that Maruti Suzuki alone has around 2.20 lakh pending bookings delayed due to the chip shortage. The problem of delayed deliveries have not magnified only in October but has been building up since August. Srivastava also said that festive discounts and bonanza offers will be very muted this time due to the supply chain issues.

Automobile sales across India usually peak during the festive season, especially around Navratra and Diwali. Despite the positive and upbeat consumer sentiment, festive discounts too help in boosting sales. In recent times, demands for personal mobility is further aiding the demand surge. However, chip shortage and its impact on vehicle production are impacting sales.

Maruti Suzuki reportedly registered 3.35 lakh units of stock inventory on October 1 last year, which has been reduced to 1.75 lakh units on the same date this year. It is even lower than September 1 number, when the inventory stocks were 2.25 lakh units.

Rajesh Menon, Director General, SIAM has said that as a result of the severe shortages of semiconductors faced by tier I and II component suppliers, auto manufacturers are facing supply constraints of parts. These include critical parts like engine electronic control units, keyless entry, ABS systems and infotainment systems.

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