Indian passenger car automobile sales growth is expected to moderate to the range of 11-13 percent by the end of the current fiscal year 2021-22 owing to the shortage of microchips, a report of Indian rating and research firm Crisil said on Wednesday, October 27.
The shortage of imported microchips will trigger a decline in sales growth, earlier seen at 16-17 percent, to 11-13 percent, the Crisil report said, based on the analysis of the three largest domestic passenger car manufacturers which account for 70 percent of the market.
Crisil blamed the shortage on poor inventory planning by the industry, the hoarding of key semi-conductors and microchips by China, and the pandemic hitting outputs of key component manufacturers globally.
This will lead to tempered growth of the automobile industry this fiscal year and the shortage is expected to continue until the first quarter of the next fiscal year as capacity addition to microchip manufacturing is not keeping pace with rising demand as it takes 12-18 months for new production capacities to come on stream, Crisil said.