India Car Sales Drop 14% In August As Chip Shortage Hurt Supplies

Staff at JBM Auto Ltd. auto components manufacturing facility. (Source: Company website) 

India Car Sales Drop 14% In August As Chip Shortage Hurt Supplies

Sales of cars and utility vehicles plunged over the the preceding month as global semiconductor shortage worsens, and input cost woes deepen.

Domestic wholesales of passenger vehicles fell 13.8% month-on-month to 2.32 lakh units in August, according to data released by the Society of Indian Automobile Manufacturers on Friday.

SIAM numbers for August 2021 (MoM)

  • Car sales fell 16.5% to 1.08 lakh units.

  • Wholesales of utility vehicles fell 9% to 1.12 lakh units.

  • Scooter sales however rose 23.4% to 4.51 lakh units.

  • Motorcycle sales fell 1.34% to 8.25 lakh units.

  • Total two-wheeler sales rose 6.18% to 13.31 lakh units.

  • Three-wheeler sales increased 29% to 23,210 units.

Overall the auto sales fell 3.29% over the preceding month.

This comes as the auto industry coming out of the second wave disruption that led to dealership closures and staggered manufacturing shutdowns as the lockdown restrictions are eased, is hit with severe shortage of chips, the brains of electronic components inside cars that control everything from steering to emissions.

Semiconductors crisis which began last December worsened amid mounting infections in the key producer of Malaysia, is hurting automakers severely in the country. That even forced Maruti Suzuki India Ltd., India’s largest carmaker, to announce production holiday in August.

"The global semi-conductor shortage continues and now it is having an acute impact on output across the auto industry," Rajesh Menon, director-general at SIAM said, adding that high commodity prices are increasing the cost of production.

“Against such strong headwinds, SIAM members are working hard to meet customers’ demand and expectations, while ensuring safety of its people across the value chain.”

Also read: ‘Things Are Out Of Our Hands!’: Anxious Auto Dealers Anticipate Festive Sales Washout

Also read: M&M Says Chip Shortage To Lower September Output By Up To 25%

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