It seems like the worst of the semiconductor shortage issue is behind auto companies globally. Morgan Stanley released a note on Monday stating that the auto chip shortage issue is now in the rearview mirror.

The report finds that the Malaysian fabrication plants are back to 100 percent and that in Asia, there is a pent up demand for server shipments. These are being released and this should give a boost to the automobile industry which is already seeing car production starting to recover.

Passenger vehicle wholesales in India declined by 27 percent year-on-year in October with semiconductor shortage hitting production of automobile manufacturers, according to the auto industry body SIAM.

The report comes as a light at the end of the tunnel for the auto industry which has till now been voicing concerns of the prolonging shortage.

The auto stocks, at the time of publishing, are outperforming the benchmark indices, which are trading flat. The Nifty Auto is up 3 percent compared to the Nifty50 which is down 0.01 percent.

Large global automakers like Toyota have said that they are progressively narrowing the production cuts. The Volkswagen CEO has also echoed a similar view a few days back saying that the chip supply problem is easing now.

Also Read: M&M to invest Rs 3,000 cr in EV market over next 2-3 years; expects chip shortage issue to resolve soon

Even in the local carmakers, the OEMs have indicated that the worst of the chip shortage is behind them and it could take at best 3-4 months for the issue to be over.

Watch the accompanying video of CNBC-TV18’s Sonia Shenoy for more details.

(Edited by : Abhishek Jha)

First Published:Nov 16, 2021 2:00 PM IST