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Auto industry fails to pick up pace as chip shortage hurts production

Fresh chip scarcity may result in 4th straight year contraction in volumes

Photo: Bloomberg
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Photo: Bloomberg

Arindam Majumder New Delhi
Automakers struggled to lift sales in the first month of the new financial year (2022-23) as a fresh scarcity of semiconductor chips hamstrung production.

While there was optimism that the scarcity of electronic chips would gradually ease, a surge in Omicron variant infections in China prompted authorities there to lock down residents, close factories and stop truck traffic, snarling already frayed supply chains.

The latest disruption increases the risk of a fourth straight year of contraction in volumes for the nation’s automakers. The first two waves of Covid, which triggered a semiconductor shortage, caused volumes to shrink in 2019-20, 2020-21, and 2021-22.

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