Martin Schwenk, MD & CEO Mercedes-Benz India, told media that the situation is now 'cynical' to discuss allocation. It is obviously logical that if a part is available, it will be distributed across various markets
Amidst the ongoing Russian-Ukrainian border tussle, several automobile experts have now arrived at a conclusion that the Indian clusters of Korean and the European automobile makers might grab some huge benefits. In the middle of the huge semiconductor production slump throughout the globe, the decision of the European car makers to halt production in Russia implies chipset for Russian manufacturing could be sent to other countries with growing markets, mostly India.
The point to be noted is that Russia has a 1.5-million-unit automobile market. Experts noted that the beneficiary companies could be the Indian units of Renault, Kia, Skoda, Hyundai, and Volkswagen, including the lavish Mercedes Benz. It would be supposedly a positive news for the Indians who are eagerly waiting for long to get the deliveries of their SUVs and cars. Many of the customers are in queue for more than 10 months due to unavailability of semiconductors, which is now an imperative component in every modern car.
Last year, the manufacturers in India suffered a revenue loss of around $5 billion in spite of an augmenting demand for SUVs and cars. Now, for Renault and Kia, Czech Republic is the top three market, while for Skoda, the biggest market is Germany and then comes Russia, which is bigger than its home grown market Czech. It implies, if the production of the car slashes in Russia, the chip availability will be limited in there and hence, a massive portion will be rerouted to India probably.
Venkatram Mamillapalle, managing director of Renault India, told ET exclusively, "The chips will have to be consumed, so they will be distributed to the other regions of the world. However, it has a lead time, and the impact may not be seen immediately. If the situation persists till April, India too may be able to get a part share from the allocation meant for Russia.”
