Semiconductor shortage cripples Maruti and Mahindra production

Representational Purpose | Photo by Vishnu Mohanan

Earlier this month, Maruti Suzuki (MSIL) had announced that its contract manufacturing company—Suzuki Motor Gujarat (SMG)—is temporarily cutting down production, at least until 21st August, due to the ongoing global chip shortage caused by the pandemic. According to the latest reports, the situation has gotten a lot worse and the company might resort to a 30-40% cut in production. Which means the country’s top carmaker with over 43% market share, could lose INR 2,500-3,000 crore in revenue this month.

As for Mahindra, thousands of vehicles are reportedly lying at its Nashik facility waiting for ECU chips. If that’s not bad enough, the company is reportedly shipping the vehicles to dealers without the infotainment display—to be installed by the dealers themselves at a later date.

The situation might also explain why Mahindra hasn’t yet revealed pricing for all the variants of the new XUV700. All other carmakers and their suppliers are also most likely facing the heat, but are yet to share an update.

Sources: MSIL, ETAuto, Team-BHP

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