Russia-Ukraine crisis to dent India's auto sector

New Delhi: India's automobile industry is expected to bear the brunt of lower supplies of components triggered by the ongoing Russia-Ukraine war. Besides, the industry is expected to face subdued consumer sentiment as OMCs are expected to raise domestic fuel prices in consonance with high crude cost.

Notably, both the countries produce key raw materials which are used in components that are key to producing automobiles such as semiconductors. Currently, Russia is one of the largest producers of - Palladium - which is essential for memory and sensor chips along with several other rare-earth metals.

On the other hand, Ukraine is a leading producer and exporter of 'Neon Gas' that is used for several processes in the manufacturing of semiconductors like etching circuit designs into silicon wafers to create chips.

Notably, while the Covid's impact on semiconductor production eases, the pressure is expected to be build-up from the ongoing geo-political crisis. In the last one year, the shortage has impacted production of vehicles, consequently, elongating waiting periods and escalating cost.

On a technical basis, semiconductors play a critical part in the production of internal combustion engines. They are an integral part of all kinds of sensors and controls in any vehicle.