Chip Shortage To Hurt Maruti Suzuki’s Output In The Festive Month Of October
Maruti Suzuki India Ltd., India's largest carmaker, expects the chip shortage to impact its vehicle production in October, a festive month when demand rises.
Production at its plant in Haryana and contract manufacturer Suzuki Motor Gujarat Pvt.'s facility in Gujarat is likely to fall "owing to a supply constraint of electronic components due to the semiconductor shortage situation", according to the company's exchange filing. The maker of Baleno expects volumes across the two locations to be around 60% of the normal levels.
As expected, the semiconductor shortage is now hurting the festival season, Gaurav Vangaal, associate director at IHS Markit, said. The visibility on production schedules is diminishing every week and the severe shortage is likely to continue this quarter too, he said.
Maruti Suzuki is among the automakers worst impacted by the chip shortage. In the last two months, the company scaled down its production activity as it grapples with the shortage of components.
The carmaker had temporarily halted production for three consecutive Saturdays in August and cut two shifts to one as the semiconductor shortage deepened. In September, it reduced the output by 40%.
The chip crunch began in December last year as sale of laptops and mobile phones to televisions soared with people working remotely during the pandemic. Now rising Covid-19 cases in key supplier markets such as Malaysia has deepened the problem.
Last month, Mahindra & Mahindra Ltd. had lowered the output by up to 25%.