India Dec auto output, sales dip on chip, Omicron woes

India's automobile output and sales fell in December, weighed down by supply-related shortfalls and rising Covid-19 Omicron variant cases affecting mobility.

Automobile production of 1.64mn in December was down by 14pc on the same period a year earlier and by 3pc from the previous month, while sales declined by 11pc from the previous year and 3pc on the month to 1.25mn units, according to the Society of Indian Automobile Manufacturers (Siam).

April-December 2021 output of 16.9mn units represented an increase of 9pc on the year but remained 18pc lower than pre-pandemic 2019, while sales during the same period dipped by 1pc on the year and slumped by 24pc from 2019, Siam data show.

"Demand in the passenger vehicle segment was largely affected due to supply constraints, while the two-wheeler segment was impacted by subdued demand," Siam director-general Rajesh Menon said.

The surge in Covid-19 cases has prompted state governments to put strict restrictions in place, while the global semiconductor shortage continues to pressure the automobile segment.

Total auto sales stood at 1.56mn units in December, down by 16pc from a year ago and by 14pc on the month, according to the Federation of Automobile Dealers Associations (Fada).

Working from home and the Omicron variant, along with the high cost of ownership, will continue to have a negative effect on the auto retail segment, Fada said. The sector accounts for about 8-10pc of total steel demand.

The Indian government last month approved a $10bn scheme to set up semiconductor and display manufacturing in the country, in a push to become a global hub for electronics production.

By Sumita Layek