Suzuki Expects 60% Drop In September Production Due To Chip Shortage
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India’s top carmaker Maruti Suzuki said on Tuesday that the global chip shortage will hurt production at its plants in the states of Haryana and Gujarat in September. Total production volume across both locations could be around 40% of normal output, it said in a regulatory filing.
Top Indian carmakers, like their global peers, have been hit by semiconductor supply chain disruptions during the pandemic, which drove up demand for chips used in electronics like computers as people worked from home, and hit output at many automakers.
Tata Motors and Mahindra and Mahindra Ltd have already warned of the impact from rising commodity prices and a global shortage of semiconductors, combined with pandemic uncertainty.
In July, Tata Motors said it expected the chip supply crunch in the second quarter to be greater than in the first, likely resulting in wholesale volumes for its Jaguar Land Rover to be about 50% lower than planned.
Analysts earlier said Maruti was better positioned than rivals as it was not dependent on a single vendor for chips.
However, Maruti Chairman RC Bhargava has indicated the semiconductor crisis was not over and that it is difficult to predict what happens next.
Questions & Answers
Q.Which specific regions will experience production cuts due to the chip shortage?
Which specific regions will experience production cuts due to the chip shortage?
Production will be affected at Maruti Suzuki's plants located in the Indian states of Haryana and Gujarat. The global semiconductor supply chain disruptions are impacting output across these two key locations.
Q.Have other major Indian car manufacturers also been affected by the semiconductor shortage?
Have other major Indian car manufacturers also been affected by the semiconductor shortage?
Yes, other prominent Indian carmakers such as Tata Motors and Mahindra and Mahindra Ltd have previously warned about the semiconductor shortage's impact. Global peers have also faced similar supply chain disruptions during the pandemic.
Q.What was the previous expectation regarding Maruti Suzuki's vulnerability to chip shortages?
What was the previous expectation regarding Maruti Suzuki's vulnerability to chip shortages?
Analysts had previously suggested that Maruti Suzuki was in a better position than its rivals. This was due to the company not being reliant on a single vendor for its semiconductor chip supplies.
Q.What was the expected impact of the chip shortage on Tata Motors' Jaguar Land Rover wholesale volumes?
What was the expected impact of the chip shortage on Tata Motors' Jaguar Land Rover wholesale volumes?
In July, Tata Motors stated that it anticipated Jaguar Land Rover's wholesale volumes in the second quarter would be approximately 50% lower than planned. This was a direct result of the escalating chip supply crunch.
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