If you’re thinking of buying a new car,
then you would probably be aware of the extra-long waiting periods to get it
delivered these days. While long waiting periods for new launches were not
uncommon, the current times have made everything inaccessible, from the budget
to the extraordinary segment. People who booked their cars a while ago are yet
to receive them. Here are a few reasons to explain why.
Semiconductor Shortage
The shortage of semiconductors due to
supply chain issues has caused a massive disruption in the automobile
production process. All modern cars come with a lot of electrical components
and circuits that operate various important functions, especially safety.
Things like speed sensor data, ABS and EBD, deploying of airbags, ADAS, and
more use electronic communications to assist the desired action. With
semiconductors mainly being manufactured in Taiwan and China, production has
been massively hampered due to the COVID-19 pandemic.
Rise In Demand
India has the 5th largest
automobile industry in the world and demand for new vehicles has risen at an
exponential rate over the last few years. The country has seen a major shift in
trend from shared mobility to personal mobility in the post pandemic world. The
growth of the market has been solid and forecasts predict that it will continue
to increase. Initiatives like the Vehicle Scrappage Policy have also aided in
the sales of new cars as the government provides incentives to replace your old
car with a new one.
Furthermore, new car launches planned for
2020 were deferred to 2021-22 due to the global pandemic. This has seen
overwhelming demand, with most newly-launched models breaking booking records
for their respective brands, leading to extended delivery times. Even though
most manufacturers are increasing production, it will still take some time for
the waiting periods to decrease to a reasonable timeframe.
Production affected due to the
pandemic
Due to the global pandemic, most of the
automakers manufacturing facilities haven’t been able to work at full capacity.
This is also the case for imported vehicle components which were stopped as
manufacturing was at a minimum or completely stopped during COVID-19. Most
production facilities are starting to get back to their full capacity, but the
number of backlogs means it is yet to get back to normal.
Disruption To the Supply Chain
The biggest reason for extended waiting
periods for new cars is the disruption of the supply chain for manufacturers.
Nationwide lockdowns and movement restrictions of goods and raw material supply
to production facilities across the country meant delivery times were adversely
affected during the COVID-19 pandemic. Even though this got better now, the
aforementioned production backlog means there are still a lot of pending
orders. This is expected to be resolved in the coming months.
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