Shortage of chips slows car sales growth | Ahmedabad News

AHMEDABAD: Even though new car reservations are booming, the shortage of semiconductors that has plagued the past year has led to a deceleration in the growth of car sales. Data provided by car dealers suggests that the number of reservations is increasing despite a longer waiting period for cars. Yet, due to a longer lead time, overall sales are low.
For example, in July, 24,892 cars were sold across Gujarat, according to data compiled by the Federation of Automobile Dealers Association (ADF), up just 4.15% from 23,899 cars sold in July 2021.

Since February this year, car sales have maintained a double-digit growth rate compared to the corresponding months of 2021. “Dealers have good reservations. There is no problem on the demand front and people who want to buy new cars are booking them,” said Pranav Shah, Chairman, FADA-Gujarat Region. “However, supply chain constraints remain. Demand is particularly strong for electric cars as well as SUVs for which the wait is up to 9-14 months. Supply issues hamper sales.
According to FADA, after the Russian-Ukrainian war, the world faces the prospect of Taiwan-China tensions. “For this reason, the threat of a shortage of semiconductors looms again as the chipmaker TSMC raises the red flag that if war breaks out, Taiwanese chipmakers would be rendered ‘non-operational,'” FADA said in a statement. Interestingly, in July, car dealerships in Ahmedabad saw good sales growth thanks to the Rath Yatra festivities. Still, the festive sentiment failed to drive overall sales growth. In fact, compared to the corresponding pre-pandemic period of July 2019, car sales remained down 10%.
“We have reservations for at least 10,000 cars to be delivered over the next 12 months. The waiting period for all cars is not 12 months, but some high-demand models have a longer waiting period. “, said Jigar Vyas, the CEO of a city-based car dealership. “Due to the shortage of chips, the supply is limited. We have noticed a shift in customer preference towards high-end models and therefore demand is high.”