Chip shortage likely to dip PV sales in the festive season

The crisis of semiconductor shortage has given a big blow to the industry and is likely to impact the festive season sales wherein consumers have to remain detached in pertaining lucrative sales offers from various carmakers.

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Chip shortage likely to dip PV sales in festive season

The rising chip shortage in the automobile industry is likely to impact the production of four-wheelers and could derail sales during the festive season. Automobile dealers’ body Fada (Federation of Automobile Dealers Association) has expressed concern over the growing chip shortage and asserted that this could lead to a struggling supply of the inadequate number of vehicles to dealers in the coming months.

 

The crisis of semiconductor shortage has given a big blow to the industry and is likely to impact the festive season sales wherein consumers have to remain detached in pertaining lucrative sales offers from various carmakers. According to Fada President, Vinkesh Gulati, auto dealers are facing the most challenging phase of their business career as Covid-19 after effect continues to play spoil-sport. 

 

Gulati also noted, due to the unavailability of semi-conductors and ABS chips, shortage of containers, and high metal prices, consumers for the first time will not be able to make a handsome purchase in the upcoming festive season that happens to be a booming period for the auto industry as well. The frequent price rises are also keeping the entry-level buyers at bay, Gulati noted. 

 

The auto industry accounts for 10 percent of the overall semiconductor demands and the rest is diverted in appliances, gadgets, and other electronic devices. According to Fada, PV sales stood at 1,82,651 units in August 2020, whereas the body has reported a 39 percent year-on-year rise in passenger vehicle retail sales in August 2021 to 2, 53,363 units.

 

Why is there a chip shortage? 

 

Since March 2020, at a time when the global pandemic left the countries in a complete shutdown, it also eventually prompted automakers, suppliers, and car dealers to shut down operations. The countries across the globe went into recession with zero outputs in most of the industrial sector. This has also left the automakers to quickly cancel orders for parts of computer chips.

 

So, when the manufacturing sector started to pace normalcy and factories restarted, stronger demands of vehicles emerged. As a matter of fact, due to the cancellation of chip orders, the demands for the chip were diverted to other electrical devices such as phones and laptops. As a result, the carmakers are forced to feel the supply crunch. 

 

 

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Chip shortage likely to dip PV sales in the festive season
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The crisis of semiconductor shortage has given a big blow to the industry and is likely to impact the festive season sales wherein consumers have to remain detached in pertaining lucrative sales offers from various carmakers.
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THE POLICY TIMES
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