Auto Production Cuts due to Semiconductor Shortages Dent Sales in September 2021: SIAM
Moneylife Digital Team 14 October 2021
Curtailed production due to semiconductor shortages heavily dented India's domestic passenger vehicle sales on a year-on-year (y-o-y) and sequential basis in September. Further, challenges about high operating and ownership costs due to rising fuel and commodity prices subdued buyers' sentiments.
 
According to the Society of Indian Automobile Manufacturers (SIAM) data during September, passenger vehicle (PV) sales fell over 41% to 160,070 units from 275,072 units in a year-ago period. On a sequential basis, September's PV sales were far lower than August's level of 232,224 units. The PV sales data comprises cars, utility vehicles and vans.
 
Kenichi Ayukawa, president of SIAM, says, "Indian automobile industry continues to face new challenges. While on the one hand, we see a revival in vehicle demand, the shortage of semiconductor chips on the other, is causing a major concern for the industry. Many members have curtailed their production plans."
 
"Coupled with the festive season demand, this has led to long waiting time for the customers on popular models of some segments. High raw material prices also continue to be a challenge. The industry is taking all possible measures to mitigate the impact of such supply chain issues and optimise production," he added.
 
According to Rajesh Menon, director-general of SIAM, due to the semiconductor shortage, in September 2021, there was a drop in production of about 37.46% for passenger vehicles and 17.15% for two-wheelers (2Ws).
 
"On the sales front, barring the COVID period, first half (H1) sales of PVs are still below 2016-17 levels, that of 2Ws are below 2011-12 levels, that of commercial vehicles (CVs) are below 2010-11 levels and that of three-wheelers (3Ws) is still below 2000-01 levels," he says.
 
Data shared by the automobile industry body shows that during September, vehicle production in PVs, 3Ws, 2Ws and quadric-cycle categories fell 18.9% or to 2.12 million units compared with the data for the same month last year.
 
 
PV sales excluding BMW, Mercedes and Volvo, in the domestic market were 160,070 units, while the numbers for 3Ws and 2Ws were 29,185 and 1.52 million units in September 2021, respectively.
 
During the first six months of FY20-21, vehicle production in PVs, 3Ws, 2Ws and quadric-cycle was 11 million units. PV category reported sales of 1.38 million units, and CV recorded sales of 272,000 units, while for 3Ws and 2Ws, sales numbers were 95,421 units and 6.51 million units during the first half, data from SIAM shows.
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