A global shortage of chipsets is expected to impact the availability of consumer durables this festival season. White goods makers are experiencing delays in the arrival of components, disrupting production.

“We have started witnessing a sudden shortage of chipsets due to production issues. This will impact the availability of consumer durable products across categories and influence the festival season sales. There are also delays in the arrival of shipments of chipsets. The production issue and delays will affect stock availability across categories. It is difficult to predict when will the situation normalise,” said Avneet Singh Marwah CEO of SPPL exclusive brand licensee of Thomson in India to businessline.

According to industry players, the shortage in chipsets could hit supply at a time when festive demand is expected to pick up. “We anticipated the shortage earlier this year and shipped in additional stocks to meet the demand for now. But if the supply side situation does not improve soon we may have to think of other options including cutting down on tech features on our products,” said an executive of a Japanese electronic brand.

Arun Bajaj , Director, Videotex said his company had stocked up inventory in place for the festive season. “There were Red Sea disruptions and challenges in shipment before, but we are now undertaking future orders as well,” Bajaj said. 

Industry experts said that there have been disruptions in the supply chain with the increasing tension in the Middle East and the availability of chips in the country.

“There has been an impact on production due to the delayed arrival of crucial raw materials, including chipsets caused by the Red Sea crisis. Companies that ramped up production earlier are likely to experience a lesser impact. Alternate routes are being used for transportation, resulting in delays and increased shipment costs,” said an expert.

Festival sales

Durable goods makers witnessed muted growth in H1 due to the general elections and are expecting an increase in sales in H2. Manufacturers are expecting a growth of up to 40 per cent this festival season. Original Equipment Manufacturers (OEM) had increased their production capacity in H1 anticipating higher demand.

“The festival season begins with Onam in Kerala for which we have already announced the specially curated Onam Maharaja offer for our beloved Kerala consumers. The offers include extended warranties and cashback to easy EMI and lucky gifts worth up to ₹95,000 and we will see the momentum of offers continuing through the next couple of months till Diwali. To add to the festive cheer, we have an extensive product lineup with intelligent AI Technology that optimises performance and adds convenience. We expect 40 per cent higher consumption during the festival season this year in compared to last year,” said Kamal Nandi, Business Head and EVP, of Godrej Appliances.

“Consumers can anticipate some of the year’s lowest prices, with discounts ranging from 15 per cent to 30 per cent,” added Avneet.

Related Topics