Semiconductor shortage issue: Inhibit growth in auto parts manufacturing

New Delhi, India: (ICRA) is an Indian independent and professional investment information and credit rating agency says that the growth in the auto parts manufacturing sector is expected to decrease to about 17% to 20% in the current financial year.

Semiconductor shortage issue

ICRA also states that the growth in the sector is going to slow due to the shortage of semiconductor chips and declining export earnings volume. It should also be noted that although the production of the products is on the rise compared to last year’s situation, the situation was much worse last year due to corona pandemic situation.

Compared to the previous financial year, the operating profit margin is lower than the usual in the current financial year. It is expected that there will be good progress in terms of exports in the next few months, if semiconductor shortage issues is solved.

It takes up to around six months for semiconductor chips to reach the automobile spare parts industries. This is due to there are a number of distrubutors between the semiconductor manufacturer and the auto parts manufacturers, ICRA said.