How Indian Car Manufacturers Can Battle The Semiconductor Shortage?

Indian automobile industry just like the rest of the world is severely affected by the ongoing semiconductor(chip) shortage. People are avoiding public transport in order to maintain a safe distance from others and hence on the lookout for cars. This rise in demand after the pandemic is making the situation even worse. So let’s take a look at how Indian car manufacturers can battle the semiconductor shortage.

Here are a few methods that the manufacturers are following in order to meet the demand:

1. Increase waiting periods for specific models

   

   This is something that every manufacturer is pushed into doing and frankly, it is the first step to recovery. Adjust and allocate the models as per availability and because of this, some models have a waiting period of over a year. We wonder if the customers can be patient enough to wait for a year since manufacturers usually plan to introduce newer models with a few insignificant updates. Nevertheless, until there is a chip shortage, there will be longer waiting periods especially if the model becomes a hit.

2. Remove features that are dependant on sensors and chips

   

   The recent example for this that we came to know is that Tata is removing the semi-digital instrument cluster from the mid variants of the Altroz and providing them with the analogue instrument cluster found on the base model. This is to make sure they meet the demand of the higher selling top-end models and the semi-digital instrument cluster requires chips that are currently less in supply. Mahindra, also have followed suit with the XUV300 and deleted the ESC on lower models and removed the 7th airbag on the top-spec. All this, without reducing the price of the vehicle which is not a good thing for the customer.

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3. Build their own chips

   

   Now, this may be a far-fetched idea but some of the international car manufacturers have already started building their own chips for the lesser important parts, like the driver door controls, parking aid module, boot lid opener, etc. These are important but not very heavily dependant on complex chips so the manufacturers manage to build them on their own. If the manufacturers hire more talent to specialize in the chips then they can reduce the dependency on 3rd party companies. But this does take a lot of time and manpower as of now though so it is not an immediate solution.

Some manufacturers in other countries are supposedly using 3rd party aftermarket accessories in order to complete the vehicle build in time and meet the demand. This reduces the waiting period but increases the risk of the accessories longevity since they are aftermarket.

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As time goes by, the manufacturers have no option but to come up with more innovative ideas to reduce the impact. Let us know how you think the Indian car manufacturers can battle the semiconductor shortage in the comment section below.