The shortage of semiconductors is holding back recovery of the auto sector. Both the Society for Auto Manufacturers’ Association (SIAM) and credit rating agency Icra have flagged the issue of the global crisis of semi-conductors which does not seem to have any long-term end in sight.

“No one can predict when the crisis will be resolved as multiple industries are affected by the shortage,” said an industry insider.

Ashish Modani, vice-president and sector head — corporate sector ratings, Icra, said: “Semiconductor shortage is playing spoilsport, constraining overall production volume, though underlying demand remains strong. The industry is expecting a loss of over 1 lakh units in the scond quarter of FY22 due to the shortage, which could have a bearing on overall annual production and sales volume.”

Rajesh Menon, director- general of Siam, said: “The auto industry is managing supply chain challenges while ensuring the safety of its people and keeping a close eye on the onset of a third wave. Amidst such an uncertain economic environment, the industry is trying to maximise production and sales.”