NEW DELHI: Owing to a supply constraint of electronic components due to the shortage of semiconductors, India’s largest carmaker Maruti Suzuki said on Tuesday that its production in September could be around only 40% of the usual output.
“The Company is expecting an adverse impact on vehicle production in the month of September in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat Pvt. Ltd. (SMG) in Gujarat. Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 40% of normal production,” the carmaker said in a regulatory filing on Tuesday.
Maruti Suzuki’s production ability in India is around 22.5 lakh units per annum, translating to 1.87 lakh units per month. A 40% production means MSIL would be able to produce only about 75,000 vehicles in September.
This fall will have a big impact on company’s revenue and India’s cumulative PV sales. As for consumers, this means more waiting period for models such as Baleno, Swift, Dzire and Brezza. Mitul Shah, head of Research (Institutional Equity) at Reliance Securities, said that Maruti Suzuki’s production coming down to 40% of normal level in Sep ‘21 would certainly impact festive sales as already most of the models are on wait list.
“This may lead to marginal drop of 3-4% YoY in company’s 2QFY22 sales volume, despite lower base. MSIL being market leader with around 50% market share, its subdued sales performance would also impact performance of entire PV industry in Q2 of FY22. Price hike would support company to record flat revenue on YoY basis in the quarter despite likely decline in volumes,” Shah told TNIE. Last week, MSIL chairman RC Bhargava had said that the semiconductor shortage problem is expected to be over by 2022.