India Ratings and Research (Ind-Ra) believes that the domestic auto sector could continue to face supply chain headwinds, especially due to semiconductor chips shortages, over the remainder of FY22. This is likely to curtail the sales growth expected for the auto industry in FY22, particularly in the passenger vehicles (PV) segment, and also adversely impact profitability. Ind-Ra expects the semiconductor chips shortage to continue until end-1H22, although the availability could gradually improve over this period. Ind-Ra further expects original equipment manufacturers (OEMs) to reassess their supply chains to diversify and/or partially localise their raw material requirements over the near to medium term.
Additional information is available at www.indiaratings.co.in.
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