Sales recover in Indian auto market but chip crisis may continue to be a worry

Society of Indian Automobile Manufacturers has warned that the semiconductor shortage will continue to disturb production even as vehicle sales for 2021 made a recovery.

File photo used for representational purpose. (Bloomberg)
File photo used for representational purpose.

Kenichi Ayukawa, President of the association told Bloomberg that one can expect the shortage to continue as it will take a long time for new investments to take place in the semiconductor sector. Ayukawa added, “For the sustainable growth of the industry, there is a need for both demand improvement and easing of supply chain challenges."

Also Read : Lamborghini India aims to remain consistent in terms of sales for 2022

Ayukawa, who is also the Chief Executive Officer of Maruti Suzuki India Ltd, noted that the semiconductor shortage has affected supplies of components such as engine control units and vehicle information systems. Therefore, an increase in the cost of raw materials has pushed automakers to increase product prices. He also added that due to this, entry-level vehicles have become expensive due to the “steep" increase in steel prices, and stricter emission and safety regulations.

Maruti Suzuki announced a price hike on Saturday where it said that the company is increasing the prices of its vehicles by 4.3 per cent with immediate effect. The prices have been increased across the portfolio in the range of 0.1 per cent to 4.3 per cent. The company attributed the hike to reasons such as an increase in the cost of essential commodities example steel, aluminium, copper, plastic and precious metals. Last month, a Reuters report stated that production at automaker's two facilities in Haryana and in Gujarat was to remain affected with production being at 80 per cent to 85 per cent of normal production.

Also Read : Honda Cars India registers 26 per cent jump in wholesales in 2021 

The association also informed that India's total vehicle sales rose by 6 per cent that is to 18.5 million units last year, Bloomberg reported. Sales of passenger cars including cars and SUVs grew by 27 per cent to 3.1 million in 2021. Sales of two-wheelers also saw an increase to 14.5 million last year from 14.3 million in 2020.

First Published Date: 15 Jan 2022, 14:40 PM IST
Shopping Bag Shop Now
70% OFF
VENO Portable High Power 2 in 1 Car Vacuum Cleaner | USB Rechargeable Wireless Handheld Car Vacuum Cleaner Traveling, Camping Reusable and Sustainable (2 in 1 Vacuum Cleaner)
Rs. 899 Rs. 2,999
Godrej aer O – Hanging Car Air Freshener | Car Accessories | Cool Aqua (7.5g)
Rs. 99
SHAYONAM Dent Removal Kit - Powerful Car Dent Repair Kit - Suction Cup Dent Puller Handle Lifter and Dent Repair Puller for Car Body Dent, Glass, Tiles and Mirror (Plastic)
Rs. 349
Godrej aer O – Hanging Car Air Freshener | Car Accessories | Musk After Smoke (7.5g)
Rs. 99

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.