Waiting Periods Likely To Extend Amid New Supply Disruptions
Published On Mar 22, 2022 11:00 AM By Sonny
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The global interdependence for components from outside suppliers, especially electronics, continues to affect the auto industry
The automotive supply chains have been thoroughly disrupted since the pandemic broke out in 2020. It seemed like the industry was beginning to recover from those disruptions but new global events have once again affected various supply routes for various components, further affecting vehicle delivery timelines.
The most recent and direct issue to affect automotive production timelines is the fresh streak of lockdowns in certain parts of China due to a spike in Covid cases. The lockdowns would affect certain component manufacturers, especially electrical ones, further straining supplies and related deliverables. Another recent geopolitical crisis affecting supply routes is the active military conflict between Russia and Ukraine.
Related: 5 Things You Should Know About The Semiconductor Shortage Affecting The Car Industry
One of the biggest disruptions to the auto industry from 2020 was the shortage of semiconductors which are essential for various electronic functions of the modern car. While this crisis was already expected to carry through well into 2022, new developments suggest it could continue to 2023 as well. Even the Indian government’s incentives to set up local manufacturing will take time before they can help combat the global shortage of semiconductors.
Also read: Government Will Subsidise Chip Manufacturing By Up To 50 Percent
As a result of these disruptions, carmakers have to restrict their outputs which can extend the waiting periods for cars that use more of the limited supplies. Other ways the industry is impacted by such disruptions includes rising input costs, which results in higher prices for the end customers as well. In summary, cars will take longer to arrive and could be more expensive when they do.
Currently, the likes of the tech-loaded Mahindra XUV700 and MG Astor already command high waiting periods. Carmakers may opt to counter delayed deliveries by introducing variants with fewer tech features, a measure witnessed in other markets during the peak of the semiconductor shortage.
