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Trends in India's domestic automobile market are expected to remain 'fluidic' in 2022 due to unpredictable factors, said automaker MG Motor India.

Accordingly, the carmaker cited unpredictable factors such as Covid-19 pandemic, global semiconductor shortage, freight cost amongst others for its 'cautious optimism' for 2022.

In a conversation with IANS, MG Motor India President and Managing Director Rajeev Chaba said: "Currently, the domestic market is witnessing increased demand, but is also impacted by the global semiconductor shortage."

"The situation will remain fluidic in 2022 due to unpredictable factors... We are constantly monitoring these factors and aligning our operations to capitalise the best output."

According to Chaba, the new normal has set unique challenges for the industry.

"The biggest challenge is to sustain business operations and ensure the financial health of the organisation and its stakeholders."

"With the industry having exhibited resilience over the last two years, we are looking towards 2022 with 'Cautious Optimism'."

Besides, Chaba cited that the company has witnessed positive consumer sentiment due to pent-up demand.

On a year-to-date basis, the company reported a growth of 56 per cent with retail of 37,723 units (Jan-November, 2021) over 24,152 sold in the same period last year.

"However, the production levels are currently impacted and will remain so in the next quarter due to the global shortage of semiconductor chips."

Nevertheless, he exuded confidence that supplies will "optimise" in the coming year.

At present, 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.

Lately, the shortage has extended the waiting period along with escalated prices.

"With the usage of technology going up and the advent of 'IoT' and '5G' in India, the demand for semiconductor chips is increasing."

"However, we are working towards fulfilling our delivery commitments to customers and expect supplies to optimise by the first quarter in the coming year."

Besides, the company will focus on meeting the Centre's guidelines for the production linked (PLI) scheme for the auto sector by localising parts for its next EV.

The plan is to assemble batteries as well as other parts in India to drive down the cost.

"The car will be customised to meet the Indian regulations. Further, to meet the Government's guidelines for the production linked (PLI) scheme, we will undertake maximum possible localisation, which would include battery assembly and other parts."

"With all these initiatives in place, we expect EVs to contribute over 20 per cent to our overall sales in the next two years."

Currently, the company sells electric SUV 'ZS EV' which is available in two variants, priced at Rs 21 lakh and Rs 24.68 lakh (ex-showroom).

ZS EV continues to attract customers in India as we average 700 bookings per month.

"The new EV, which will be a futuristic car, will be brought to the Indian market in the next financial year."

"Based on the global platform, the new EV will be developed and expected to be priced between Rs 10 lakh and Rs 15 lakh addressing the mass segment."

Currently, the company offers Hector, ZS EV, and Gloster in India.

(Rohit Vaid can be contacted at rohit.v@ians.in)