There is a massive shortage of semiconductors and a lot of the auto original equipment manufacturers (OEMs) use these semiconductors and therefore it is expected that there could be a production hit.
Speaking in an interview to CNBC-TV18, Rakesh Sharma, ED of Bajaj Auto said, “There is a scramble for semiconductors right now and this is putting a lot of pressure on the supply chain.”
“If it becomes very serious then it impacts the production, but the acute issue for us is in the high-end bikes and it’s putting a lot of pressure on planning,” he said.
“However, we do not buy these things directly. We are impacted indirectly because they are sourced by our tier-one vendors and this big surge, we have been told, is occurring in range of electronic items across the world and that has swiped away the capacity,” said Sharma.
On the production front, Sharma said, “I do not think this is going to disrupt production. It might disrupt a few models but about 95-97 percent production is not getting impacted.”
Meanwhile, NK Minda, CMD of Minda Industries said, “We are not affected but there has been pressure in supply chain and this is mainly because electronics production is increased in China and in an auto segment, we use less electronic components, semiconductors vis-à-vis telecom.
Minda expects this issue to get resolved by the end of January 2021. “We will see what exactly China is producing and how long this will sustain,” he said.
For entire discussion, watch video