With the China-Taiwan tussle escalating, the threat of key raw material for automobile manufacturing — semiconductor — shortage is once again looming, said the Federation of Automobile Dealers Associations of India (FADA). The association’s President Vinkesh Gulati said that after the Russia-Ukraine war, the world is now facing the possibility of the Taiwan-China war.
“Due to this, the threat of semiconductor shortage is once again looming as chip-maker TSMC raises a red flag that if war hits, Taiwanese chip manufacturers would be rendered ‘non- operable’,” Gulati said.
US House Speaker Nancy Pelosi’s visit to Taiwan left China heavily infuriated and the communist nation warned the US that it would “pay the price”. The automobile sales during July 2022 saw a decline of 8 per cent on a yearly basis. July is generally considered a lean month before the festival season hits in August.
Breaking into segments, three-wheelers and commercial vehicles were the only segments which grew during the month by 80 per cent and 27 per cent. According to the data released by FADA, two-wheelers, passenger vehicles and tractor sales saw lower retail sales, decreasing by 11 per cent, 5 per cent and 28 per cent, respectively.
Erratic monsoon led to decreased Kharif sowing as the area under paddy dipped by 13 per cent at the end of July, resulting in tractor sales dipping. The three-wheeler space continued to see demand recovery even though full recovery to pre-Covid levels is still some time away.
It said that it is evident that e-rickshaws were the biggest mover in the segment. Demand recovery in the three-wheelers passenger category also showed that Covid is now behind us as passenger movement has once again started gaining traction.
Commercial vehicle retail figures continue to witness good demand as the government’s infrastructure push is helping customers conclude their purchases. Apart from this, the bus segment also witnessed the beginning of demand recovery as educational institutions and offices are once again back to normal mode.
On the outlook, it remains “cautiously optimistic” as the country enters into the festival season.