Supply chain uncertainty saddles auto component firms with inventory

Impact on passenger car makers due to chip crisis and raw material shortage, and on two-wheeler, tractor and CV makers due to demand swings has trickle-down effect on autoparts makers

Amid supply chain disruption and skyrocketing commodity prices that have been worsened by the Russian invasion of Ukraine, automotive (auto) component makers are staring at a dilemma they haven’t faced in some years. Most have seen the inventory of raw materials and finished goods increase.

Here is why: passenger vehicle makers are no longer able to adhere to the production schedules, owing to the shortage of critical parts like semiconductors and raw materials.

On the other hand, two-wheeler, tractor, and commercial vehicle makers haven’t been able to give accurate projections on production volumes, owing to the frequent swings in demand.

Consequently, suppliers are