Tata to solve car waiting periods in India
The COVID-19 pandemic has affected everyone in one way or the other. The global automobile industry is no different and has not escaped from the side-effects of the pandemic. The supply chain management has gone for a toss, resulting in a longer waiting period for popular cars. This has led to buyers skipping their favourite car for one that gets delivered in a shorter waiting period. However, Tata Group is now coming forward to resolve the issue of long car waiting periods in India. In today’s article, we will discuss the complete scenario. Let’s go.
The cause of long car waiting periods in India
Due to the unforeseen COVID-19 global pandemic (ongoing) last year, most countries across the globe had to undergo complete lockdown. This resulted in a shortage of essential components, especially semiconductors. These semiconductors are used in various products like computers, mobile devices, home appliances, gaming consoles, and car electronics.
Semiconductors are parts that are ordered by automakers as and when required, and they were not used to storing a stock of these. With the sudden lockdown, most car manufacturers had to halt their production that led to the mass cancellation of semiconductor orders. The automobile productions came to a halt whereas the personal computing business simultaneously saw a massive boom due to the ‘work from home’ culture. This led to semiconductor manufacturers diverting their orders to personal computing companies. Now, with the automobile market gaining its pace back, there is a mismatch in the demand and supply orders.
The current situation
Automakers across the globe are cutting down production. Volkswagen and Ford have reported a cut down in production. Toyota is said to have cut down production to 40% followed by Mahindra and Maruti at 30% overall. Maruti’s Gujarat plant’s production is likely to be cut by 65-70%, which translates to production of just 15,000 to 20,000 units in this plant. Maruti’s Manesar plant will also take a production cut to balance out the semiconductor shortage.
What is Tata Group planning?
“On rebalancing supply chains, India can significantly benefit from the geopolitical shifts that we are seeing. At the group, we have already set up a business to seize the promise of high-tech manufacturing of electronics, precision manufacturing, assembly and testing of semiconductors in the medium term,” N Chandrasekaran, Chairman of Tata Group, said while speaking at IMC Chamber of Commerce and Industry’s AGM.
Tata could appear as a knight in shining armour to save the situation. As Tata Group enters the 5G equipment manufacturing, they have also initiated a process of manufacturing semiconductors in India. This will restore the imbalance between demand and supply and semiconductor production is expected to be back to normal by mid-2022. If things go as planned, Tata Group will play a very crucial role in normalising the semiconductor shortage issue. Ultimately, this would result in a shorter waiting period for car deliveries.
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