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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Maruti Suzuki India has established an Advanced Manufacturing Lab (AML) at the Government Industrial Training Institute (ITI) in Hassangarh, Rohtak. The facility is designed to train approximately 200 students in its first year of operation under the company's corporate social responsibility (CSR) skill development programme.

The laboratory replicates automotive manufacturing environments to provide technical instruction in vehicle assembly, welding, industrial painting, machining, mechatronics and workplace safety protocols.

The project is aligned with the central government's Skill India mission and aims to prepare students for technical positions within the domestic automotive manufacturing sector.

The facility was opened during an event attended by Rohtak Deputy Commissioner Sachin Gupta and executives from Maruti Suzuki. During the ceremony, the company distributed formal apprenticeship offers to selected students who will join Maruti Suzuki's production facilities upon completing their coursework.

Maruti Suzuki currently provides infrastructure and training support to 31 ITIs across India. The Hassangarh facility marks the 18th Advanced Manufacturing Lab established by the vehicle manufacturer. The firm also operates four Japan-India Institutes for Manufacturing (JIMs) located in Mehsana and Gandhinagar in Gujarat and Manesar and Sonipat in Haryana, which deliver technical education based on Japanese shop-floor management principles.

Rahul Bharti, Senior Executive Officer of Corporate Affairs, Maruti Suzuki India, said, “Through the Advanced Manufacturing Lab at Hassangarh, we are bringing real shop-floor learning and modern machinery into classrooms. This initiative, aligned with Skill India mission, equips students with confidence to handle industry-specific processes and nurtures talent for the evolving automotive ecosystem. It is part of our commitment to build a skilled, future-ready workforce for India’s manufacturing sector.”

Sachin Gupta, IAS, Deputy Commissioner of Rohtak, said, “The establishment of the Advanced Manufacturing Lab at ITI Hassangarh marks a defining milestone in Rohtak’s journey towards becoming a centre of excellence in skill development and a significant contribution to the vision of Viksit Bharat. By introducing industry-grade infrastructure, advanced manufacturing technologies, and hands-on technical training, Maruti Suzuki has created an ecosystem that seamlessly aligns academic learning with the dynamic requirements of modern industry. This initiative will not only equip students and trainees with future-ready skills and enhance employability, but will also nurture a culture of innovation, productivity, and technical excellence. The lab will play a pivotal role in developing a highly skilled workforce capable of supporting India’s industrial transformation and strengthening the nation’s competitiveness in the global manufacturing landscape.”

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SheerDrive, an AI-led pre-owned vehicle technology platform, has been named First Runner-Up in the 10th Cohort of the Maruti Suzuki Accelerator Program. Following the selection, the startup has secured a paid Proof-of-Concept (PoC) engagement with Maruti Suzuki India.

The Maruti Suzuki Accelerator Cohort 10 evaluates and selects startups developing artificial intelligence (AI) and technology-driven solutions for application across manufacturing, mobility, customer experience and automotive operations.

SheerDrive’s digital pricing infrastructure is designed to streamline price discovery in the used-car sector. The system processes live market signals, historical transaction trends, vehicle condition data and machine learning analytics to establish a real-time pricing layer. The platform is used by original equipment manufacturers (OEMs), dealerships, financial institutions and consumers to guide vehicle valuation and trade-in decisions.

The company has developed a portfolio of products aimed at digitising the pre-owned vehicle supply chain for automotive players, banks, non-banking financial companies (NBFCs) and insurers.

Its products include VIAR, an AI-driven vehicle evaluation and pricing platform – Otobids Meta, a patented auction aggregation infrastructure that links multiple auction marketplaces through a single digital layer and SheerDrivePRO, a dedicated B2B auction marketplace for used vehicles.

Ravi Mehra, Founder, SheerDrive, said, “Price discovery remains one of the most critical unsolved problems in the used-car ecosystem. We’ve always believed that the future of vehicle upgrades in India will depend on transparent, data-backed pricing and scientific vehicle evaluation. Being recognised by Maruti Suzuki through this engagement is a meaningful validation of that vision, and we look forward to contributing to the next phase of innovation in India’s mobility ecosystem.”

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Toyota Kirloskar Motor, one of the leading passenger vehicle manufacturers, has signed a Memorandum of Understanding (MoU) with the Government of Karnataka to establish its global ‘TKM Bizintel Hub’ in KWIN City, Bengaluru.

The automaker will infuse INR 12 billion as initial capital over the next five years, marking the first anchor investment for the smart city development project.

The facility will be spread across 300 acres along the Doddaballapur–Dabaspet Highway. The hub will serve multiple corporate objectives, including the testing and evaluation of new mobility solutions, digital transformation across supply chain operations and the implementation of intelligent vehicle manufacturing systems. The initial phase of the project is expected to generate approximately 200 jobs.

The agreement was signed in the presence of Karnataka Chief Minister Siddaramaiah and Large and Medium Industries Minister Dr M.B. Patil. KWIN (Knowledge, Wellbeing, and Innovation) City and is being developed in phases across a total area of 5,800 acres, with a focus on integrating technology, healthcare and educational sectors.

Siddaramaiah, Chief Minister, Government of Karnataka, said, “Toyota Kirloskar Motor has been a trusted long-term partner in Karnataka’s growth journey. The MoU marks another important milestone as we work together to deepen technology-led investments, create quality employment and promote sustainable industrial development. This partnership further strengthens Karnataka’s leadership as a global investment destination and reinforces our commitment to innovation‑ driven growth.”

Masakazu Yoshimura, Chairman, MD & CEO, Toyota Kirloskar Motor, stated, “We are grateful to the Government of Karnataka for its continued support and collaboration over the years which has played a key role in our journey. India has always been a strategically important market for Toyota to drive innovation and sustainable mobility initiatives. The TKM Bizintel Hub will support testing and evaluation activities, advancements in digital transformation and intelligent manufacturing across the entire supply chain business, leveraging on India’s robust information technology ecosystem with skilled talent. Anchored in TKM’s focus on localization and responsible growth, this initiative aligns with the company’s multi pathway approach towards achieving carbon neutrality goals and meeting the national priorities such as Make in India and Atmanirbhar Bharat.”

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The UK government has opened applications for operators to run self-driving cars, allowing citizens to book autonomous taxi and bus-style services across Great Britain later this year.

The pilot scheme will allow technology firms to deploy autonomous vehicles on public roads to gather real-world performance evidence. These services will be subject to safety assessments and rigorous regulatory approval checks by the government, including verification of protections against cyber and security threats. Local transport authorities, such as Transport for London, must also provide local consent to ensure operations align with regional infrastructure priorities.

Learnings collected from these commercial pilots will guide the development of permanent self-driving vehicle regulations. This regulatory framework follows a formal government call for evidence that concluded in March. Data shows that human error currently contributes to 88 percent of collisions on UK roads, and the implementation of automated systems aims to improve overall road safety. Industry projections estimate that the British automated passenger services market could be worth up to GBP 3.7 billion annually by 2040.

Simon Lightwood, Roads and Buses Minister, said, “Self-driving vehicles represent a transformative opportunity for Britain, opening up independent travel for disabled people and older adults, while driving growth and creating high-skilled jobs across the UK. This pilot scheme brings that future closer, giving passengers the opportunity to experience self-driving travel first-hand while ensuring safety always comes first.”

Sarfraz Maredia, Global Head of Autonomous Mobility and Delivery, Uber, stated, “This is an exciting and important step toward launching autonomous vehicles in the UK. London has long been a pioneering city for Uber, where we’ve launched some of our biggest innovations and we can’t wait to give people in the capital the chance to experience autonomous rides this year.”

Ben Loewenstein, Head of Policy and Government Affairs for the UK and Europe, Waymo, added, “The UK is leading the way in enabling the safe deployment of pilot autonomous vehicle services. We hope to soon become part of London’s transport network and demonstrate the safety, accessibility and sustainability benefits of battery-electric autonomous vehicles through the government’s pilot scheme. We are working closely with the Department for Transport and Transport for London to ensure our operations align with their goals.”

Sarah Gates, VP of Global Affairs and Assurance, Wayve, noted, “The UK has all the ingredients to become a global leader in the deployment of self-driving vehicles and today’s launch of the automated passenger services scheme marks an important milestone. Wayve has been developing its technology in the UK for nearly a decade and we’re excited to bring our supervised passenger service to market here this year.”

Mike Hawes, Chief Executive, SMMT, commented, “Today is a significant milestone in the safe and responsible rollout of automated vehicles on British roads. For the first time, legislation will allow operators to offer passenger-carrying commercial services – such as robotaxis – to the general public. Government’s decision to bring forward this legislation has positioned Britain as a leading European market for automated vehicles and a frontrunner in physical AI investment, development and deployment.”

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