High demand, low supply: hit by chip shortage, automakers slow deliveries

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The auto industry is going through a phase of high demand, but supply side constraints due to chip shortages are playing a spoiling role as manufacturers have to cut back on production.

This leads to high bookings for newly launched models as well as top selling models. The end result is that the wait time for buyers could continue to grow over the next few months.

Top-selling models like the Hyundai Creta, Kia Seltos and Maruti Suzuki Swift continue to be in high demand. Outside of them, cars launched in the past two or three months have gotten huge bookings, although there isn’t enough clarity as to when automakers will be able to deliver them.

For example, Mahindra’s XUV700 SUV, whose reservations began on Oct. 7, recorded more than 65,000 bookings in just two weeks, the automaker said on Oct. 20. Available in five and seven seater configurations, the XUV700 starts at Rs 12.49 lakh. (ex-showroom).

Likewise, the Thar, launched last year in October and priced at Rs 12.49 lakh, has recorded more than 75,000 reservations.

The Thar, in fact, has one of the longest waiting periods; The Federation of Automobile Dealers Associations (Fada) said the waiting period for Thar diesel is 9-11 months, and that for Thar gasoline is 3-4 months. MG’s Astor, whose bookings started on Oct. 21 and recorded 5,000 bookings in minutes, has been completely sold for calendar year 2021, the company said.

MG Motor India added that it aims to deliver the first 5,000 units during this year.

Reservations are still open but deliveries (of cars reserved beyond the first 5,000) will only take place in 2022. The Astor is priced at Rs 9.78 lakh from.

Skoda’s Kushaq and Volkswagen’s Taigun also get strong bookings. Skoda announced in September that the Kushaq had passed the 10,000 reservation milestone. Similarly, the Taigun, launched on September 23, had recorded 12,221 pre-reservations (even before the announcement of its price). These two SUVs are priced at Rs 10.49 lakh.

The most recent car to be launched is the Tata’s Punch, priced at Rs 5.49 lakh. Shailesh Chandra, president of the passenger vehicle business unit, Tata Motors, recently told FE that Tata Motors opened reservations for the Punch on October 4, and although the automaker does not share reservation numbers, the Punch got “the highest pre-launch bookings among the portfolio of cars we have today”.

– FE


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