The global shortage of semiconductors or chips in the aftermath of the Covid-19 led pandemic has eased as per a report by Crisil. A development that led most automakers to cut down production significantly and postpone the launch of new models or to put them to production through 2020, 2021, 2022 and a good part of 2023 has finally eased to iron out any supply chain disruptions that may be there. 

Expected to address and improve predictive demand forecast, the better availability of chips should enable better production schedules. By FY2025-26, Crisil analysts are of the opinion that demand-supply dynamics should be more balance with additional manufacturing capacities getting commissioned. 

With the chips possessing distinct electrical properties that make them the cornerstone of all electronic equipment and devices, it is the auto industry that has come to use them for a variety of functions as automobiles turn increasingly software driven. While the computer and communication equipment (C&C) segment consumes roughly 63 percent of the chips produced, the auto industry consumes roughly 13 percent of them. The other industrial segments consume about 12 percent. 

With new developments such as autonomous and EVs, the use of semiconductors in automobiles is only slated to rise. With passenger vehicles the recipient of most technological innovations ahead of other segments such as two-wheelers, three-wheelers and commercial vehicles, it should not come as a surprise that they consume about 1,500 chips on average – the highest among all automobile types. 

As more advanced electronic features are incorporated, the use for chips increases. The electric passenger vehicles, for example, use almost twice as many chips as internal combustion engine (ICE) passenger vehicles do. The improving supply and slowing demand for computers and mobile phones is therefore looked upon as a blessing in disguise for automobiles and their manufacturers. 

Anuj Sethi, Senior Director, CRISIL Ratings, mentioned, “The chip shortage faced by Indian passenger vehicle makers is easing, with current availability at 85-90 percent of total requirement. The production loss on account of the chip shortage, which had halved to about 300,000 PVs on-year in fiscal 2023, is estimated to have further declined to under 200,000 PVs by the end of September 2023.”

Most passenger vehicle manufacturers are currently operating at near optimal capacity utilisation due to stronger-than-anticipated demand. New orders to be serviced remains high at about 700,000 units at the end of September 2023. 

The easing of chip shortage should help automakers honour new orders with better prediction and faster production. Global automobile demand, severely impacted by the Covid-19 pandemic, made a strong recovery in the latter part of FY2021-22. It caught automobile manufacturers off guard as they had not placed substantial orders for chips. 

The surge in demand for personal computers, laptops and mobile phones, driven by work from home, virtual learning and remote healthcare services, led to a significant chip procurement challenge for the automakers. 

Geographically, the chip ecosystem is skewed, with western nations dominating chip architecture, design, manufacturing equipment, specialised materials and chemicals. Semiconductor fabs1 on the other hand are concentrated in eastern nations, such as Taiwan and South Korea.

Given the criticality of chips in the defense and aerospace industries, the United States and the European Union have offered incentives of about USD 100 billion for localisation of semiconductor fabs. As a result, many global players are slated to spend about USD 360 billion towards setting up new facilities, which would be operational by 2025 and 2026. 

In the Indian context, demand for chips will continue to increase over the medium term, driven by the gradual rise in EV adoption and growing demand for advanced feature-laden ICE vehicles.

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Mercedes-Benz India has introduced a transformative new Dealer Management System named SKYLine, a custom platform developed in collaboration with Zoho. This system represents a significant technological leap, engineered entirely in India to meet the specific demands of the local luxury automotive market. SKYLine is built to overhaul the entire customer service journey, creating a seamless and digitally integrated experience from the moment a vehicle is booked for service until it is returned to its owner.

The platform marks a strategic departure from older, fragmented systems by implementing a modern, decentralised architecture. A key feature of this new approach is that each Mercedes-Benz dealership across India now operates on its own dedicated instance of Zoho CRM. This grants individual locations a high degree of operational autonomy while still ensuring they adhere to the brand’s centrally governed standards and processes. A critical technical achievement was the system's ability to integrate flawlessly with the manufacturer's existing European headquarters infrastructure without requiring any modifications to those core systems, facilitated by a sophisticated co-developed middleware layer.

By digitising the complete service lifecycle, SKYLine introduces unprecedented operational efficiency and transparency. The system manages a comprehensive suite of processes, including service booking, digital check-in, vehicle inspection and job card creation. It also enables skill-based assignment of technicians, allows for live job tracking and automates customer communications. This connected workflow eliminates previous inefficiencies, creating a cohesive and paperless journey for the customer. The platform's scope extends beyond core services to also streamline other dealership operations, such as managing courtesy car availability through visual dashboards and centralising processes for the growing pre-owned vehicle business.

The deployment of SKYLine was supported by an extensive rollout programme involving thousands of man-days dedicated to user training and testing to ensure widespread and effective adoption. Orchestrated by Zoho’s Enterprise Business Solutions team, the project stands as one of the most technically sophisticated and strategically important Dealer Management System implementations in the region, fundamentally modernising the customer ownership experience for Mercedes-Benz in India.

Santosh Iyer, Managing Director & CEO, Mercedes-Benz India, said, “SKYLine represents a significant step towards managing our customer service operations, being a key lever that will significantly enhance customer’s experience. This bespoke DMS is built by Zoho for our dealer partners, making it seamless and highly integrated into our global systems, redefining customer journey. With SKYLine, we are setting a new benchmark in customer experience by blending technology with personalised service. We are proud that Zoho developed a world-class, highly secured and local ‘no code-no source’ platform like SKYLine for the Indian customers, underlining the unmatched prowess of Indian technological innovation, having international adaptability. SKYLine brings transparency, efficiency and control into every service interaction, empowering customers while delivering an elevated experience which they desire from Mercedes-Benz.”

Mani Vembu, CEO, Zoho, said, “SKYLine is a technology marvel born of close collaboration and co-creation. When Mercedes-Benz India came to us with a vision that had no off-the-shelf solution, we saw an opportunity to build something truly unique. Together, we have built a decentralised platform that empowers each dealership with autonomy while maintaining central control and real-time HQ integration. To meet these complex needs, we co-developed middleware capabilities alongside our evolving Qntrl platform, enabling seamless communication across legacy protocols. This project reflects what’s possible when product teams and customers come together with a shared sense of purpose and a commitment to solving real-world challenges.”

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Ola Electric has announced that it has secured ARAI (Automotive Research Association of India) certification for its indigenously developed and manufactured 4680 Bharat Cell battery packs in a 5.2 kWh configuration. The certification was granted under the latest AIS-156 Amendment 4 standards.

This makes Ola Electric the first EV company in India to receive certification for a completely in-house developed 4680 cell battery pack.

With this milestone, Ola Electric will soon begin delivering vehicles powered by its own 4680 Bharat Cells. The certified pack is set to debut on the S1 Pro+ 5.2 kWh, making it the first Ola vehicle to use the company's homegrown cell technology.

The company states that the shift from third-party cells to its own 4680 Bharat Cells is a decisive step toward vertical integration in EVs. This is expected to significantly enhance range and performance, improve unit economics and reduce dependence on global supply chains as its upcoming Gigafactory scales production.

The certification process involved rigorous testing regimes for safety, electrical reliability and performance across extreme operating conditions, including successful clearance of water immersion, vibration durability and thermal shock resistance.

An Ola Electric spokesperson said: “With the ARAI certification of our 4680 Bharat Cell battery pack, we are ready to deliver our first vehicles powered by our own cells. This is a defining milestone in our mission to build India’s EV technology leadership and reduce reliance on global supply chains. Customers will soon be able to experience the enhanced range, performance and reliability that our homegrown cells bring to our scooters and motorcycles.”

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German automotive major Volkswagen has now produced over two million models equipped with Car2X technology for Europe, marking a step toward reducing road traffic accidents and achieving the company's ‘Vision Zero’ goal.

The Car2X technology enables networked vehicles to communicate with each other and with local traffic infrastructure in real-time, using the principle of local swarm intelligence.

The vehicles can exchange data in milliseconds without needing a mobile network connection, allowing the traffic hazard alert assist system to display warnings in the digital cockpit for occupants. These alerts are crucial in situations requiring fast transmission, such as emergency braking, sudden traffic queue ends or approaching emergency vehicles.

Connectivity is increasing through intelligent roadside units that send warnings to vehicles about events like wrong-way drivers, traffic jams, objects on the road and unusual weather.

Road operators and rescue services across Europe are integrating Car2X. Autobahn in Germany has equipped over 1,000 roadworks trailers with the technology, while Austria has installed roadside units across its motorway network. Other countries, including Italy, Spain, the Czech Republic, Hungary and Slovenia, have also installed a number of roadside units and equipped emergency vehicles.

The technology enables, for example, compatible road users receive a warning indicating the direction from which an emergency vehicle such as fire truck is approaching.

The technology acts as a virtual sensor that supplements on-board vehicle sensors. For instance, the optional Travel Assist with ACC (Adaptive Cruise Control) can reduce the vehicle's speed even if the end of a traffic queue is not yet visible.

Veronica Lehr, Head of Driver Assist Systems in Volkswagen’s Development department, said, “With the increasing use of Car2X, road traffic can become more cooperative and anticipatory in many areas. The technology is therefore a key component for our ‘Vision Zero’ – traffic without serious accidents. In addition, Volkswagen is laying the foundation for the mobility of the future, which is set to be safer, intelligent and connected.”

The Car2X direct communication in Volkswagen models uses the Wi-Fi p standard, allowing vehicles to exchange warnings and location data within a radius of up to 800 metre. The process is open and standardised, enabling communication across manufacturers. To protect privacy, the notifications are anonymised.

The traffic hazard alert assist system with Car2X-technology is currently available in models such as the Golf, T-Roc, Tiguan, Passat, ID.3, ID.4, ID.5 and is standard in the ID.7. Volkswagen was recently awarded the AutomotiveINNOVATIONS Award 2025 by the Centre of Automotive Management (CAM) as the most innovative volume brand, with electric mobility and connectivity highlighted.

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South Korea-based tier 2 supplier Mobase Electronics Co. and California-based UltraSense Systems have announced the production ramp of a solid-state infotainment touch bar now shipping on a high-volume global SUV platform.

The new touch bar aims to modernise the cabin interface by replacing previous mechanical interfaces. It pairs UltraSense’s Force HMI Controller with in-plane piezoelectric force sensing, localised haptics and capacitive touch to deliver a sleek design and a ‘press-to-confirm’ feel.

The force-based approach reduces false triggering compared with capacitive-only designs and offers tuneable force thresholds. The solution also meets automotive Grade-B operating requirements.

The companies highlight that the technology aligns with Euro NCAP’s 2026 direction encouraging tactile controls for functions, as the solid-state bar beneath the display allows drivers to adjust settings by feel rather than visually navigating menus.

Kwangyoon Lee, Vice-Chairman & CEO, Mobase Electronics, said, “Working with UltraSense, we’re delivering a contemporary interface that elevates both feel and manufacturability. The combination of capacitive touch, piezoelectric force and haptics gives drivers confident control with a modern look.”

Mo Maghsoudnia, Founder & CEO, UltraSense Systems, said, “Mobase has been an excellent partner from concept to SOP. Our Force HMI Controller with in-plane sensing brings a robust HMI solution with a premium experience, supporting the modern interior designs automakers want.”

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