Global chip shortage has been creating waves across the market, Maruti Suzuki being the latest company to speak up again on the potential losses owing to the same. The leading carmaker said on Thursday that it is expecting around 60 percent production at two of its plants relative to normal levels.
“Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the company is expecting an adverse impact on vehicle production in the month of October’21 in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat (SMG) in Gujarat,” Maruti Suzuki said in a statement.
“Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 60 percent of normal production,” Maruti Suzuki added.
In August, it had said total production volume across both locations could be around 40% of normal output in September.
Recently other players in the automobile sector like Tata Motors and Mahindra & Mahindra had also expressed their concerns, stating their productions in September have taken a blow due to the chip crisis.
Supply-side disruptions coupled with surging demands from the consumer electronics industry have generated a global predicament of chip shortage. Car producers have had the worst of the lot during these times, most of them pushed to reduce productions or hike prices. Automakers are emphasising more on the productions of high-margin models and have passed some of the costs to the customers.
All top carmakers in India, including Maruti, Tata Motors and Mahindra, have increased prices multiple times in 2021. Yet, most of these companies are not cutting on productions in October. Hyundai, Tata Motors, Kia and Mahindra & Mahindra are going ahead with their production schedules. Volkswagen, Skoda and MG Motor are preparing to scale up production for their newly launched models.
With Maruti’s competitors are not following a similar perspective to production for October, the Delhi-based carmaker’s market share at the wholesale level is expected to come under pressure.
At a time when the automotive industry obtains 30-40 percent of its demands; the festive season, reduced productions might cost the company on a heavy note.