Challenges for the Indian automobile industry continue to persist. While on one hand, we see a revival in vehicle demand, on the other hand, high commodity prices and semiconductor crunch has aggravated problems for auto manufacturers which is causing a major concern for the industry per se.
However, despite many concerns regarding increasing prices and semiconductor shortages, India as the sixth-largest economy in the world characterised by an exponential consumer base, is desirable to potential investors. The country’s cost base is a great advantage. India offers a conducive ambience for foreign investments in the near future.
Key highlights of the report:
- High vehicle prices (on the back of increased commodity prices) may not reinstate until 2023.
- 12 key components have been identified with localisation potential, seeking to cut imports by 15-20% or INR 34,400 crore over a period of five years.
- The semiconductor shortage has resulted in an increased lead-time from six weeks in July to a record high of 21 weeks in August.
- Semiconductor shortage expected to improve gradually by 2022.
- Japan has emerged as an enabling force in key nation building initiatives with India aspiring to be a leading power in a multipolar world, sourcing technology, investments, and development assistance to modernise its economic foundation.
Download the report here [ 3558 kb ].
Auto Track Q2 F22 delves deep into India’s readiness for localisation and potential for ‘China plus one’ strategy. It also discusses long and short-term solutions for semiconductor shortage.