Still not clear for how long semiconductors shortage will impact vehicle production in India: ACMA

New Delhi: Auto components industry body ACMA on Friday said it is still not clear as to what extent and for how long the shortage of semiconductors will impact vehicle production in India, following major supplier Bosch Ltd's submission that it has been impacted severely by supply shortage for imported micro-processors. Automotive Component Manufacturers Association Of India (ACMA) President Deepak Jain said incidents such as these only precipitate the need for localisation and self-reliance in auto electronics in the country.

"ACMA is keenly watching the situation as it unfolds. It is still not clear as to what extent and for how long the shortage of semiconductors will impact vehicle production in India. Any stoppage of vehicle lines has a resonating effect on the entire auto component manufacturing ecosystem," he said in a statement.

ACMA is continuing to engage with the OEMs and monitoring the situation, Jain added.

"The electronic content in vehicles has been progressively increasing and incidents such as these only precipitate the need for localisation and self-reliance in auto electronics in the country," he said.

On Tuesday, Bosch Ltd, a major supplier, had stated that its imports of micro-processors (semiconductors) have been hit following a global surge in demand from consuemr electronics industry.

In a regulatory filing, the company had said "the demand in the consumer electronics industry has seen steep escalations driven by safety and hygiene sentiments as well as the rise of 5G connectivity. This led to a surge in global demand of semiconductors, a critical component in manufacturing of automotive electronics".

As an outcome, the company added, "Import of Bosch Ltd has been impacted with severe supply shortage for imported microprocessors (semiconductors), leading to reduced ability to deliver to the automotive market demand in India."

Restoration of normalcy in global supply situation for imported components and impacts are being very closely assessed and addressed on top priority, it added.

Already utility vehicles and farm equipment major Mahindra & Mahindra has stated that its operations in the automotive sector will be affected by the global supply shortage of micro-processors (semiconductors) used in Electronic Control Unit (ECUs) which is supplied by Bosch Ltd.

"This is estimated to result in reduction in production/sales volume of the company (automotive division) and Mahindra Vehicle Manufacturers Ltd, a wholly owned subsidiary of the company in the last quarter of FY 2020-2021," M&M had said in a regulatory filing earlier this week.