The Automotive Component Manufacturers Association (Acma) of India has highlighted the need for localisation and self-reliance in auto electronics in the country in the wake of the crisis in the supply of semiconductors red-flagged by one of its members, Bosch.
The German component supplier, in compliance under Regulation 30 of the Securities and Exchange Board of India (Sebi), had stated that “imports of Bosch Ltd have been impacted with severe supply shortage for micro-processors (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”.
The OEMs currently impacted by this shortage of semiconductors include Mahindra and Mahindra and Ashok Leyland who have highlighted the shortage crisis, said Vinnie Mehta of the Acma.
Mahindra & Mahindra said the global shortage of semiconductors supplied by Bosch is expected to lower production and sales in its automotive sector in the last quarter of the ongoing financial year. “The company is engaging closely with Bosch and assessing likely production loss for the last quarter of 2020-2021 on account of this supply disruption as also steps to be taken to minimise the impact of the same,” M&M said in an exchange filing.
The semiconductors are components of the electronic component unit (ECU) of the engine and also the antilock braking system (ABS).
Apart from Bosch, Continenta and other Japanese and Korean companies supplied semi-conductors to Indian OEMs which are manufactured in Taiwan, South Korea, Japan, Germany and USA.
Bosch in its regulatory filing had stated: “The demand in the consumer electronics industry has seen steep escalations driven by safety and hygiene sentiments as well as the rise of the 5G connectivity. This led to a global surge in the demand of semiconductors, a critical component in manufacturing of automotive electronics.”
The automotive sector was going through a downturn in 2019-20 because of structural changes and this was further impacted with stringent lockdowns because of the Covid-19 pandemic. In the second quarter of 2020-21, the automotive industry showed signs of recovery but remained impacted because of volatile forecasts and disruptions in global supply chain and planning.
Reacting to the development ACMA President Deepak Jain said: “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.”
