Covid-19 has disrupted the entire supply chain of auto-manufacturers.
The late delivery of cars in the auto industry has become a pervasive word and a constant source of frustration for people in Pakistan. Many car manufacturers are facing issues relating to the supply chain and logistics due to the devastating third wave of Covid-19. Another problem being faced by this industry is the shortage of chips in the market. Resultantly, cars are either unavailable or customers have to face long queues. The former is the case with Hyundai Nishat. The manufacturer has published a sanctioned announcement, notifying its buyers that the delivery of the Hyundai Tucson is going to be postponed due to the “scarcity of a particular semiconductor microchip” which is an indispensable component of numerous contemporary cars.
The statement has reassured that the bookings have only been temporarily delayed and those who have already booked will be given priority when the deliveries resume. This issue is not only limited to Pakistan. It is a worldwide phenomenon. The reason that this dilemma exists is because of the simple demand-and-supply concept. The supply of chips is limited. Its demand is generated from various industries such as the tech industry which includes mobile phones, laptops, and smart gear. With the advent of Covid-19 and lockdowns, demand for tech products increased exponentially and suppliers of chips shifted their production lines to satisfy this demand. But this led to the suffering of the automotive industry. This has also resulted in price hikes, to the detriment of new car-buyers.
The car manufacturers are also under pressure from the government. A new policy states that auto manufacturers have to deliver the cars within two months of the booking. The new policy is expected to be enacted in the 2021-22 budget and is geared towards the eradication of the "own" prevalent in the market. Hyundai has responded by not taking any bookings at all.