Bolstering indigenisation

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The auto industry, reeling under the impact of the coronavirus pandemic, may see its recovery delayed further due to acute shortage of semiconductors. According to industry experts, the chip shortage may play spoilsport in the incipient rebound story. The third wave overhang is also a major factor that is keeping the industry on the tenterhooks. The sector, which had pinned hopes on the festive season to spark a turnaround, is facing a race against time to meet the expected demand at this time of the year.

It is a matter of great discomfiture that none of the leading carmakers ever thought of putting in place a robust infrastructure to combat global supply bottlenecks. Despite clarion calls for ‘Make In India’, the initiative has sputtered and companies have failed to realise that the long-term benefits of investing now will only expand their profit margins in the future. Bolstering indigenisation is the need of the hour and to ensure the industry is able to meet the demand of consumers in the country, they have to find ways to reduce dependency on foreign countries for auto components. It is a matter of shame that a lockdown in Malaysia would hamper production of vehicles in India since semiconductor chips come all the way to be fitted into automobiles assembled in plants in India. There is a Covid surge in the south east Asian country and now car production will be dependent on when the wave recedes and production resumes in that nation.

According to reports, the waiting period for models across brands is six-seven months. With buoyancy seen in consumer sentiments, it would be a missed opportunity for carmakers if they are not able to deliver vehicles in this auspicious period. However, this situation might act as a driving force behind renewed efforts to boost local production of auto components and delink from global disruptions. It is never too late to learn from mistakes and the Indian auto industry needs to embrace this philosophy at the earliest.