Semi-conductor shortage hits ABS supply chain for two wheelers

The global shortage of semi-conductors has affected the entire automobile industry. After car makers, two wheeler manufacturers have now written to the government expressing concerns about the shortage of Anti-Lock Braking Systems. CNBC-TV18 has reviewed a letter written by two-wheeler makers to the government.

Manufacturers have requested the government for help in ensuring priority allocation of ABS components for the two wheeler industry. "We have sought early customs clearances of consignments of semiconductors and other parts which are required for ABS systems," said a source.

Industry sources told CNBC-TV18 that the lack of visibility of ABS supplies is creating production uncertainty. India's largest exporter of two wheelers, Bajaj Auto, has said that established ABS suppliers have been unable to give a timeframe within which the shortage will be resolved. "We are getting only 70 percent of our ABS requirement. Production schedules are being reviewed every week due to the shortage. The premium segment has been impacted more and there is an increased waiting period for some models," said Rakesh Sharma, Executive Director at Bajaj Auto.

Royal Enfield, India's largest seller of middle weight motorcycles, also expressed concerns about the shortage of ABS controls over the last couple of months. "We are working closely with our suppliers to ensure sustained supply for continuity of production," said a Royal Enfield spokesperson.

CNBC-TV18 has reached out to TVS Motor Company, Hero MotoCorp and HMSI for a reaction on the shortage of ABS controls, but the companies declined to comment. Bosch and Continental which are among the biggest suppliers of ABS systems and ECU units did not comment on the impact of the shortage on two wheeler production.

However, Prashanth Doreswamy, Country Director of Continental Automotive told CNBC-TV18 in March that the semi-conductor shortage is likely to continue throughout 2021. "Two wheeler manufacturers have also been impacted due to semi-conductor shortage. Semi-conductor supply has been further impacted due to the Texas snowstorm & fire at Reneseas Electronics Japan," he said.

Sources in the automotive industry told CNBC-TV18 that the supply of semi-conductors which is essential for ECU and ABS systems will start normalising in October this year.