Global Chip Shortage May Spoil Festive Season Sales

During the manufacturing of any electronic items, small microchips play a significant role.

In India many automobile manufacturing companies are facing a shortage of chips. The shortage in chips has led to lower production, delays in delivery time, lower discounts, and higher prices.

According to reports due to the shortage of chips, the automobile sector may suffer a huge loss of sales during festive seasons as it has chocked their productions lines and supply output remains below demand, which is expected to rise further during the festive season.

Expressing concern on the shortage of chips, Automobile dealers' body Federation of Automobile Dealers Associations of India (Fada) has termed it as a "full-blown crisis".

Fada said personal vehicle sales could be derailed during the festive season as automakers are struggling to supply vehicles to dealers.

However, the manufacturer companies of smartphones, laptops, tablets, large-screen and televisions didn't feel any crisis but are worried as supplies have started slowing down due to production delays.

Experts feel that a substantial jump in demand could hit sales during the festive season.

Although sales of large companies like Apple, Samsung and other Chinese brands may not be affected during the festive season, there are many other companies that could feel the pinch.

Arjun Bajaaj, Director, Videotex International Group, said, "The shipment of raw materials for television manufacturing in India has been delayed due to traffic congestion at China ports. The time it takes for raw materials to arrive in India has increased from 28-30 days has reached to 50 days now."

"This has resulted in a delay in goods delivery and a complete revision of the production plans. Additionally, due to this, the ocean and air freight cost has gone up by 7-8 times compared to what it was before Covid, resulting in an increase in the overall freight cost," he added.

Reports have suggested that the shortage of electronic goods and products seem to be gradually rising as the festive season approaches.

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