Chip woes may derail auto production plans

Even as India's passenger vehicle sales touched a record high of 3.9 million units in 2022-23, growing 27 per cent over the previous financial year, the country's largest carmaker, Maruti Suzuki (MSIL), India said on Monday uncertainties in the electronic-component supplies might affect production in FY24.

- SOHINI DAS

MSIL said the shortage of electronic components had some impact on production in FY23.

"The Company took all possible measures to minimise the impact. As the supply situation of electronic components continues to be unpredictable, it might have some impact on the production volume in FY2023-24 as well," it said in a statement to the stock exchanges.

MSIL produced 1.92 million units in FY23 (including light commercial vehicles), 16 per cent more than the 1.65 million in FY22.

Semiconductor chips have become a significant component in today's cars. A chip can be a simple component containing a transistor, or an integrated circuit that controls a complex system.

Popular sport utility vehicles contain hundreds of semiconductor chips in them, which explains the high waiting period for these cars, especially the higher-end ones.