After almost a year long period of dampened demand in the automotive sector, manufacturers have now ramped up their production to meet the reviving demand. This has caused shortage of semiconductor components in the market as the supply is not sufficient to meet the current demand.
Hence, the automotive industry is seeking government’s support in setting local manufacturing of the critical component.
During his address at the sixth ACMA Technology Summit & ACMA Awards, Kenichi Ayukawa, President SIAM and Managing Director, Maruti Suzuki said that the government’s support is needed since investments required for localization of semiconductor is large and the beneficiaries include companies from the non-auto sectors also.
“SIAM and ACMA have identified specific areas such as engine transmission, electrical, tooling, grade of steel etc. that has good scope for localization. For semiconductor parts, government support is required for localization as it needs huge investments. Auto demand alone is not enough for localization in electronics. We will surely seek minister’s time to present our plan of action to meet this vision of our honorable Prime Minister,” Ayukawa said.
The average level of localization in the auto industry is 70 percent. Some companies have hiked the levels to beyond 90 percent too. Nitin Gadkari, minister of road transport and highways said the government is in favour of pushing for higher degree of localization within the automotive sector. “The government will consider hiking customs duty on parts which are imported,” added Gadkari.
