Economic Survey: Carmakers saddled with backlog of over 700,000 orders

Carmakers are saddled with a backlog of over 7 lakh orders as of December 2021, due to the the shortage of semiconductors, according to the Economic Survey.

With the delay in supply, the average lead time (the difference between the date of order and actually receiving in the automobile) for the industry for 2021 has been around 14 weeks globally.

India has also experienced similar trends in the automobile sector, Economic Survey 2021-22 pointed out. As per data from the Society of Indian Automobile Manufacturers (SIAM), carmakers sold 2,19,421 passenger vehicles in the domestic market in December 2021, down 13 per cent (year-on-year), it stated.

 

"This is not a demand problem but a supply-side issue. The information from various car manufacturers' websites reveals a cumulative pendency of over 7 lakh orders as of December 2021," the Survey noted.

The Survey also outlined the efforts on the part of the government to boost semiconductor production in the country. The government has approved an outlay of Rs 76,000 crore for the development of semiconductors and display manufacturing ecosystem.

The government's intervention to boost this industry has come at a time when the global economy is facing an acute shortage of semiconductors due to severe disruptions in supply chains, the Survey noted.

Several companies from diverse industries have been forced to either shut or curtail production in response to breakdown of supply chains, it added.

The PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by COVID-19 but also assist them to become globally competitive especially in chip making, the Survey said.

Semiconductors are used in automobiles and its components, electronic and medical devices.

The comprehensive interventions being introduced by the government will aid in the establishment of an ecosystem that boosts semiconductor production in India, the Survey noted.