As the festive season approaches and automakers hope to recover from the damage caused by the COVID pandemic, they are finding it more difficult to deal with. A global chip shortage is forcing them to sharply cut production. On Thursday, Mahindra & Mahindra announced a 20-25% reduction in production this September, close on the heels of similar moves by Tata Motors and market leader Maruti Suzuki, which expects to ramp up its assembly lines. Will run at only 40% of its normal rate. Month.
Work from home trends spurred demand for chips from computer and electronics makers at the start of the pandemic, spurring supply. The recent delta-driven surge in Covid has had a disruptive effect in chip-making countries such as Taiwan, China and Malaysia, making matters worse. Meanwhile, higher input prices are forcing automakers to hike prices. All this has ruined the near future prospects of the automobile sector. For now, little can be done to secure the necessary chips. But at some point India will have to become self-reliant with semiconductors. The Tata Group recently announced its high-end chip ambitions. Other businesses should follow suit.
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