Maruti Suzuki Says No Visibility On Chip Supply
India’s largest carmaker has had to cut production in the last two months because of the chip shortage. And it's not sure when the supply will improve.
“[The] situation is very dynamic,” Shashank Srivastava, executive director, sales and marketing at Maruti Suzuki India Ltd., told BloombergQuint in an interview. “The visibility on the availability of chips is not so clear.”
This maker of Swift and Baleno said earlier this week that production volume would slump to 60% of the usual level in October—a month that marks the beginning of the festive period considered auspicious for new purchases. It's also crucial for automakers looking to make up for lost sales after the second wave of Covid-19.
The company estimated production volume to be around 40% of normal production in September, after halting production for three consecutive Saturdays and cutting one shift in August.
Srivastava said the carmaker tried to manage output levels by adjusting the variant and model-wise production but that wasn’t sufficient. “Even after doing the adjustments, we have had to reduce the production in a dramatic way and that is where we are struggling at the moment.”
Maruti Suzuki has received bookings for 215,000 vehicles, with the waiting period on some of the CNG models going up to six months. For the Ertiga, it's a year. Buyers of petrol variants have to wait for six to eight weeks to drive home with the vehicle, he said.
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. Rising Covid-19 cases in key supplier markets such as Malaysia has worsened the problem even as demand for personal mobility has spiked.
While Maruti Suzuki will try to focus on festive demand, Srivastava said, “Inventory levels are much below the optimum levels.”
Watch the full interview here: