Chip shortag likely to derai PV sales: Fada

Automobile dealers’ body Fada on Tuesday expressed concern that the chip shortage issue could derail passenger vehicle (PV) retail sales during the festive season, as automakers are struggling with an adequate supply of vehicles to dealers due to production challenges.

Terming semiconductor shortage as a “full-blown crisis”, the industry body warned of a lacklustre festive season, especially for the passenger vehicle dealer fraternity, with low inventory levels and non-availability of the fast-moving model variants ahead of the peak festive period.

“Auto dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoilsport. Until last year, when demand was a challenge, supply is becoming a bigger problem currently due to shortage of semiconductors, even though there is high demand for passenger vehicles,” Fada president Vinkesh Gulati said in a statement.

Every dealer by now starts planning for a bigger offtake in anticipation of a bumper festive season, but due to supply issues, inventory levels are at the lowest levels during this financial year, he added.

“With OEMS drastically ting down productions du unavailability of semicon tors and ABS chips, shorta containers and high metal ces, customers for the first may not get a vehicle of t choice and lucrative sche during this festive season. ultra-frequent price increa also keeping entry-level bu at bay,” Gulati noted.

He added that custom especially at the bottom of pyramid were trying to instead of buying articles two-wheelers.

“This will hence k demand for two-wheelers a cern. Though, with educati institutions slowly opening a ray of hope can be seen fo improved demand in com months,” Gulati said.

Fada thus sees that the term outlook will continu remain a mixed bag with witnessing demand-supply match and two-wheeler ment facing a demand cru he noted.

The usage of semiconduc in the auto industry has gon globally in recent times, technological advancem and new models coming more and more electronic tures such as Bluetooth con tivity and driver-assist, nav tion and hybrid-electric syst besides the engine control