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Chip scarcity to shave off 500k items from automobile companies’ gross sales books

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The Indian passenger automobiles trade will lose about 500,000 items of gross sales in FY22 on account of the semiconductor scarcity, scores company Icra mentioned on Wednesday.

That interprets to about ₹1,800-2,000 crore in misplaced gross sales alternative, the scores company mentioned.

ET was the primary to report final month that the Indian automobile market might lose 500,000-600,000 items in gross sales as a result of provide chain woes scarcity.

If not for the availability chain points, the trade would have this yr crossed its earlier peak annual gross sales of three.4 million items seen in FY19. Icra has now revised its gross sales forecast for FY22 downward to 8-11%, which interprets to round 3 million items.

The semiconductor disaster peaked in September, when an estimated 120,000 items gross sales was misplaced, as per a presentation from Icra. Whereas the availability state of affairs is predicted to enhance going ahead, regular provides are solely anticipated in the direction of finish of 2022.

As a result of scarcity of semiconductors, ready durations for a number of the widespread automobile fashions have gone as much as so long as 12 months. Automakers have been pressured to launch variants of their fashions with fewer options, thus decreasing the semiconductor content material per automobile and thus reducing the ready durations.

Whereas a provide scarcity has made the company revise its development forecast for the passenger automobiles market, it was a requirement situation when it got here to two-wheelers. Icra now expects the two-wheeler market to shrink by 1-4% in FY22 from an earlier low single-digit development forecast.

This has been primarily as a result of sharp improve in costs of two-wheelers over the previous two-three years on account of a number of regulatory modifications and elevated enter prices. Larger gasoline costs additional deter shoppers.

Icra’s development forecasts for the industrial automobiles and tractor segments stay the identical at 18-22% and 1-4%, respectively.

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