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Though most OEMs claim to have augmented manufacturing capabilities in order to bring down waiting periods, the semiconductor situation is beyond their control.
The automotive industry in general, and the Indian automotive sector in particular, has faced enormous challenges in recent years. Switching to BS 6 emission standards, Covid-induced lockdown, rising prices, semiconductor chip shortages, and inflationary pressures have all created numerous roadblocks at a time when demand remains reasonably robust in most major global markets. And, while lockdown appears to be a thing of the past, and the worst of the semiconductor shortage appears to be easing, it may still be difficult to walk into a showroom and drive away with a brand new car.
The demand-supply mismatch is a very real issue, and it continues to have the potential to dampen sentiment in India. Traditionally, the period from August to Diwali sees brisk business in the auto sector, but with waiting periods ranging from a few months to as much as two years for nearly all models, potential buyers may be in for a frustrating wait. The supply situation has improved, but the demand-supply gap remains enormous “According to Vinkesh Gulati of HT Auto. “The waiting period has definitely impacted customers because they have to compromise in some way for their dream vehicle, such as colour, variant, and models.””
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Gulati also pointed to the upcoming festivities. “For every family, car purchasing is an important family decision. They wait for this auspicious time and days to mark their buying. If we are not able to bring down the waiting period, it will be a lost opportunity for the automobile industry,” he outlined.
Patience is a virtue. But only for a few
When Ajit Kumar Mishra walked into a prominent south Delhi car dealership, he knew there would be a long wait for the model of his choice. “It’s just that I didn’t expect to be told that I’d get the delivery sometime in late 2023.” “says the 45-year-old CEO of a multinational corporation. “The sales executive was courteous, but cautioned that due to the high demand for the SUV model, delivery this year was out of the question.” No car is worth that long of a wait, you know.”
Mishra eventually went for the second option on his list, a model that also has a waiting period of three months for the variant he chose.
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Mohit Mangal, a 35-year-old Chartered Accountant, also chose a model with a shorter wait time. “The first dealership I went to asked me to pay an extra 50,000 and assured me that my unit would be moved up the list.” “I was already paying 20,000, so the extra amount was not a big deal for me, except for the fact that it is unethical,” he says, adding that he eventually chose a car from a Korean brand, which was delivered after two months.
For those looking at adding cars to their respective garage, the urgency is comparatively less than for first-time car buyers and those who continue to look for personal mobility options in current times of Covid. And typically, OEMs almost always brag about getting record number of bookings but none reveal the number of cancellations, a key indicator of the persisting popularity of a model or models.
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Of promises and practices
Most OEMs claim to have augmented manufacturing capabilities in order to bring down waiting periods. Most of these OEMs, however, have also pointed to how the semiconductor shortage the world over is beyond their control and rarely want to fathom a guess on when the situation is likely to improve.
While promises of faster delivery times remain, the road ahead may be a mixed bag. On the one hand, automotive experts believe a slew of new launches will help the industry. However, several financial experts warn that the risk of inflationary pressures and long wait times for newer models are likely to outweigh the potential gains in the coming months.
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