Maruti Stung By Semiconductor Short Supply: Swift, Baleno, Dzire Production Will Suffer This Year
Maruti Suzuki's volumes in August will be hit because of the shortage of semiconductors. From 4th to 11th of August, Suzuki Motor Gujarat, the company's sister business, would reduce manufacturing from two to one shift. Not only Maruti Suzuki is grappling with the scarcity; Hyundai, Tata Motors, and Mahindra are also working to find new ways to source and build more.
Some of the best-selling models like the Baleno, Swift and Dzire will be highly impacted due to the shortage of semiconductors.
The Reason Behind The Revenue Loss
According to sources, this will result in a loss of 11000 to 12000 units, or Rs 500-700 crore in income, in August. These models like Baleno, Swift and Dzire are not only popular, but they also have a significant profit margin.
In the coming week, the output is anticipated to be reduced to one shift until supplies are restored on the 12th of this month.
Due to a scarcity of parts, Maruti Suzuki was forced to reduce production volumes and change its production plan from 1.72 lakh to 1.57 lakh for the month of august owing to a shortage of semiconductors.
The Semiconductor Shortage Situation
The company is an official statement to Bombay Stock Exchange said owing to the semiconductor shortage situation, its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG), that production will be somewhat impacted in August due to the semiconductor scarcity problem.
"SMG will tentatively not carry out production on the three Saturdays (7th, 14th and 21st August). In addition, some of the production lines may see a temporary reduction from 2-shift to 1-shift working. As the situation is dynamic and uncertain, the company will monitor and take a day-to-day decision on models, lines or shifts to optimize resources for maximum efficiency," added the statement.
In Q2 of FY-22, the Indian passenger car market is expected to take a hit of close to 1 lakh units, with market revenue of over Rs 10,000 crore, lengthening the waiting period for high-demand models.