Maruti Suzuki sees adverse impact of semiconductor shortage on production in November

Maruti Suzuki India Ltd on Saturday said it expects the supply constraint of electronic components due to the semiconductor shortage to have an adverse impact on its production in November.

"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 November'21 in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG) in Gujarat," the auto major said in an exchange filing.

Terming the current situation as quite dynamic, the company said it expects its total vehicle production volume across both locations to be around 85 per cent of the normal production.

The company's production capacity at Gurgaon and Manesar plants in Haryana is around 15 lakh units per annum. SMG, which supplies vehicles exclusively to MSI, has an additional installed production capacity of 7.5 lakh units per annum.

Also Read: Material costs at an all-time high for Maruti Suzuki: RC Bhargava

Earlier this week, Maruti Suzuki reported a steep 65 per cent year-on-year decline in its net profit for July-September quarter at Rs 475.3 crore as the global shortage in the supply of electronic components and higher commodity prices hit the company hard.

Maruti Suzuki said it could not produce an estimated 1,16,000 vehicles during the quarter owing to the electronics component shortage, mostly corresponding to the domestic models.

The company had more than 2,00,000 pending customer orders at the end of the September quarter for which it is making all efforts to expedite deliveries, it said.

Semiconductors or chips are crucial components of vehicles, which facilitate a wide array of features such as navigation, infotainment and traction control. Premium cars with advanced safety and entertainment features need more chips compared with the base models.

According to CRISIL Ratings, the global shortage of semiconductors will moderate the growth in India's passenger vehicle (PV) sales to 11-13 per cent in the ongoing financial year, 400-600 basis points lower than what it would have been without the scarcity.

Also Read: Semiconductor shortage to bring down India's PV sales growth to 11-13% in FY22: CRISIL