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Chip shortage: Buyers go for new Creta variants with lesser features

| Updated on: Jan 07, 2022
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Buyers opt for the Creta models with lower number of semiconductors to avoid the long waiting period

A number of buyers of India’s top-selling SUV, the Hyundai Creta, settled for a variant lower than what they had booked to avoid a longer waiting period for the vehicle.

The Korean carmaker has been able to bring down the semiconductor count on the Creta by reducing features on the mid-size SUV which are dependent on the chips.

Hyundai had introduced new Creta variants in the market four months ago as a countermeasure to deal with the ongoing chip shortage. According to a senior official of the company, buyers lapped up every available variant of the SUV.

Tarun Garg, Director (Sales, Marketing & Service), Hyundai Motor India said, “We were flexible in introducing new variants. We did that in a couple of variants in Creta and it was very well received. The customer was happy that Hyundai was able to provide options which can lead to a faster delivery. Whatever variants we offered were taken up by the consumers and now even those variants are on a wait list.”

Hyundai’s rivals too bring down chip count

Hyundai’s rivals like Tata Motors and Mahindra & Mahindra have brought down the chip count per vehicle on certain models as a stop-gap solution to tide over the chip shortage. German auto giant Volkswagen is also exploring the possibility of launching new variants of its models which consume less chips.

“We have been very agile in our operations. What is most important for us is that we should we able to offer something to the customer. This was done after consultation with the supply chain and production. This effort was really appreciated by the customers and this was how we were able to maintain our SUV leadership,” Garg added.

Hyundai has pending orders of more than 100,000 units, 40 percent of which is for the Creta. In addition to the Creta, Hyundai also experimented with solution on the Venue, a sub-four metre compact SUV positioned below the Creta.

“We launched this four months ago and it proved to be a very good way to mitigate the challenge posed by the semiconductor shortage. Many customers shifted to the new option to get a faster delivery,” Garg added.

Also read: Hyundai emerges leader in SUV segment, but Tata Motors closing gap fast

The step-down variants are offered at a cheaper price with a reduced waiting period. These variants do not have non-essential features like wireless cell phone charging. M&M, for instance, is offering new variants of the in-demand XUV700 which do not have the wireless mobile charging feature.

A car could have as many as 200 chips controlling a variety of features including entertainment systems, airbags, GPS, route mapping, backup cameras, collision avoidance sensors and others such Advanced Driver Assistance System (ADAS).

The fully loaded variant of the XUV700 comes with 170 chips, some of which power the ADAS. The number of chips powering a vehicle depends on the level of technology employed by it.

While chip supplies are steadily improving there are still shortages in the overall supply chain. “It seems that the worst is behind us but at the same time we cannot say we are not totally out of the woods. We hear that there are still issues in the supply chain but things are improving,” Garg added.

Published on January 07, 2022

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