HomeCar NewsMaruti, Hyundai, Kia, Mahindra Have 5 Lakh Customers Awaiting Delivery

Maruti, Hyundai, Kia, Mahindra Have 5 Lakh Customers Awaiting Delivery

Mahindra XUV700 Deliveries Awaiting
Image – Namaste Car

India’s largest carmaker Maruti Suzuki has the highest backlog of more than 2 lakh units

Every festive season, carmakers eye bumper sales. Things are expected to be on the slower side this year, as the automotive industry has been adversely impacted due to global chip shortage. This has led to thousands of booking backlog for carmakers like Maruti, Hyundai, Kia and Mahindra.

Dispatches shrink

Maruti Suzuki has reported a significant drop in dispatches in September. As compared to 1,52,608 units dispatched in September last year, only 68,815 units were dispatched in September 2021. This is YoY reduction of 55%. Maruti currently has booking backlog of around 2.10 lakh units, comprising Brezza and Alto.

It explains why Brezza sales have nosedived in September. Till August, Brezza used to lead in sub 4m SUV segment. In August, Brezza sales were at 12,906 units. It commanded a market share of 23.78%. In September, Brezza sales have dropped to just 1,874 units. This could possibly be one of the lowest ever monthly sales for Brezza. YoY growth is down by close to 80%. Market share has shrunk to 5.63%.

In case of Hyundai, dispatches are down by 34.2%. A total of 33,087 units were dispatched in September 2021, as compared to 50,313 units in September last year. The situation is relatively better for Mahindra with dispatches registering a decline of 12%. A total of 13,134 units were dispatched in September 2021, as compared to 14,857 units in the corresponding period last year.

Maruti, Hyunda, Kia have highest no of customers awaiting delivery
Image – Times of India

Mahindra too has over 1 lakh customers awaiting car delivery. XUV700 which opened for bookings a few days ago, has already amassed 50k bookings. While Thar also has about 50k pending deliveries.

Prolonged wait for customers

While carmakers are forced to deal with falling revenues, customers who have booked their car will have to wait longer to get delivery. As a solution, many buyers have resorted to place bookings for multiple cars. This will eventually lead to large scale booking cancellations, further complicating the challenges being faced by carmakers.

There are several reasons for global chip shortage. Key among them is the disruption of supply chain caused by Covid-19 pandemic. Other reasons include the 2021 drought in Taiwan and China–United States trade war.

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Taiwan leads in chip manufacturing with Taiwan Semiconductor Manufacturing Company Limited (TSMC) alone commanding global market share of more than 50%. Taiwan had faced one of its worst droughts in 2021. This has impacted chip manufacturing, as such factories need huge amounts of ultra-pure water.

Increased demand for semiconductors is another key reason for chip shortage. Present day cars have increased digitization with features such as infotainment system, digital instrument cluster, sensor controlled engine and components, internet connected smart features and driver assistance systems.

Outside the automotive space, there has been an increased demand for electronic goods. This has also contributed to shortage of chips. Another reason is lack of adequate investment in expanding chip manufacturing capacity.

Shortage of semiconductors is expected to continue beyond the festive season. However, some carmakers appear to be immune to global chip shortage. Companies like Toyota, Tata Motors, Skoda and Nissan have reported higher dispatches in September.

Tata sales has increased to 25,730 units in September 2021, as compared to 21,199 units in September last year. Carmakers are aware of the challenges ahead and taking appropriate measures to minimize impact on revenues and customers.

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