Passenger Vehicle Production Down 13% In December 21 : SIAM

The December numbers released by the Society of Indian Automobile Manufacturers (SIAM), show the Chip Shortage taking its toll on the industry’s production and sales numbers. The Passenger Vehicle production went down by 13% to 274,227 units last month, compared to 315,838 units in December 2020. The Two-wheeler segment saw a 15% Y-o-Y drop in production at 1,296,934 units in December 21. However owning to increased eCommerce and holiday shopping, the three-wheeler segment did see an increase of 6.5% in production in December.

“Soon after the second wave, there was an increase in demand, but the industry faced supply-side issues mainly due to shortage of semiconductors. For sustainable growth of the industry, there is a need for post-demand improvement and easing out of supply chain challenges. SIAM members are working hard to ensure the safety of people in the value chain and maximize production to meet demand and minimize impact of supply chain challenges. The industry is hoping for the overall situation to improve soon” said Kenichi Ayukawa President SIAM while addressing the media. 

With high demand and low supply from the manufacturers owning to various shortages, the passenger vehicles segment, December wholesales figures saw a drop of 13%. The two-wheeler segment also saw a 10% drop in wholesales during the month of December.

“Industry has been facing the shortage of semi-conductors for over a year now, supplies of components like engine ECU, key assembly, ABS system are badly impacted. Industry is collaborating with the Semi-Conductor suppliers and it is expected that the manufacturing of the chips will be ramped up. However, the shortage is expected to continue as new investment in semi-conductors takes a long time.’ Ayukawa added.

Between October to December 2021, the production of Scooters went down by 30% to 1,040,621 units when compared to the same period from last year. Motorcycle production was down by 19% percent at 3,390,098 units compared to 2020. Meanwhile, passenger vehicles saw a 26% drop in production during the same period.

Rajeev Chaba, President and MD, MG Motor India, speaking about the company's December sales figures said, “The year 2021 was a challenging year for the entire auto industry. We foresee the situation will remain fluidic due to unpredictable factors – Omicron threat, global semiconductor shortage, and inflation risk due to an increase in material cost. However, resilient demand trends give us a reason to assume cautious optimism. The uncertainty may continue for the first 6 months of 2022 and will persist in some form throughout the year. MG Motor will constantly be monitoring these factors and aligning its operations to meet the demand.”

The total production figures for PV/2W/3W and CVs saw a drop of 22% at 4,549,031 units during the period of October – December 2021 with PV and 2W segments beings the worst hit.