A pandemic-induced global shortage of semiconductor chips drove down global auto volumes by a quarter in 2021. The pandemic is over now, and India recorded its best passenger vehicle sales in FY23.
So why do shortages continue to niggle? Mint explains: How has chip supply shaped up since 2021? The covid-19 pandemic led to a global shortage of semiconductor chips as demand for electronic devices surged, which caused supply chain disruptions across sectors.
The automotive industry relies heavily on these chips for various functions, and was hit particularly hard. According to JP Morgan Research, “the chip shortage is all but over".
Global automotive sales volumes are expected to rise 3% in 2023, compared to a 26% decline in the first 9 months of 2021. In general, supplies are expected to improve as capacities that started getting added in 2022 continue to be enhanced in 2023.