Chip shortage, double the cost of components, 6 times the logistics cost, how to get a cheap car!

New Delhi
Consumer electronics and auto makers of the country are currently facing shortage of semiconductor chips and components and logistics disruptions. The CEOs of these companies say that this situation is likely to continue till June. Till then the supply of cars, smartphones, laptops, televisions and refrigerators may remain tight.

He says that after these challenges are overcome, the launch of new models can be accelerated next year. Smartphone maker Realme’s International President and India CEO Madhav Sheth said that with the gradual opening of production and distribution facilities and restoration of supply, the shortage of chipsets can be overcome by the June quarter. Our launch strategy for the year 2022 is well on track.

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drop in sales
Several CEOs said that the shortage of semiconductor chips and components and logistics problems have resulted in a significant reduction in their potential sales. Also, due to this the launch of the new model has also been delayed. But he is hopeful that due to increase in production, his losses will come down next year. According to auto industry estimates, sales of car companies decreased by $5 billion in 2021, which is 20 percent of their total production. It is expected to decline by 10 per cent next year.

Gaurav Vangaal, associate director of global automotive forecasting firm IHS Markit, says that India lost about 5 lakh light vehicles in 2021 due to semiconductor shortage. Auto and electronics companies are facing problems of spare parts and logistics. The Corona pandemic has caused manufacturing problems, container shortages and heavy port traffic.

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Logistics cost 6 times
Due to this, the price of components has increased by 40-100 per cent while the logistics cost has also increased 5-6 times from the pre-covid level. In the Corona era, people are working from home and children are also studying online from home. Due to this there has been an increase in the demand for the products. People are buying expensive products and cars. Even the shortfall situation has gone from bad to worse. In the last 6 months, Renault India has suffered a loss of 25,000 to 30,000 units due to chip shortage, which is 30 percent of its monthly production.

Panasonic India CEO Manish Sharma said shipments of components such as printed circuits have been delayed by over a month and the situation should return to normal in the second half of 2022. Companies say that they have started entering into long-term contracts with companies that make components. Marie Myers, chief financial officer of computer maker HP Inc., said in a recent investor call that manufacturing, port and transit problems would persist through the first half of 2022.