Maruti Suzuki might need to bring down its manufacturing plans during the current year by 5% if the deficiency of semiconductors continues. This shortage shall result in production depleting by 70,000-80,000 units, or higher than ₹4,600 crores.
The 5% effect of units on Maruti Suzuki’s volume means shall result in a 2.5% impact on the production of India’s passenger vehicles sector. Maruti Suzuki produces 50% of the vehicles & SUV’s sold in India.
Shortage of the semiconductors has caused major issue for most of the automobile manufacturers. The semiconductor is an integral part of new-era automobiles is a worldwide phenomenon. The second quarter of the fiscal year shall account around 1lac units of manufacturing loss. The sector is already on a high backlog of orders.
The shortage of semiconductors forced Renault & Nissan to suspend their production at the Chennai plant for a day. Industry experts are predicting similar shutdowns in the coming months.
Maruti Suzuki announced to tentatively stop production on 3 Saturdays (7th, 14th & 21st August) at its Gujrat plant. This production halt shall impact the supply of top-selling variants, the Baleno, Swift and Dzire.
Suzuki Motor Corp from Japan, the parent company of Maruti Suzuki has projected a double-digit deficit in volume growth. For the India operations for the current fiscal year during the release of its first forecast. The growth turned out to be 25-30% lesser than the expectation set by the Indian analysts. Suzuki Motor has to figure its absolute auto deals to become 5.5% to 2.71 million units in FY21 (which is FY22 in India). Out of which Asia is relied upon to develop by 11% to 1.72 million units. India, which represents 90% of its Asia deals, also is anticipated to become 11%.
Because of this projection, the Indian ops is probably going to convey a yield of 1.62 million in the current financial year. This is fundamentally lower than the provisional manufacturing plan of approximately 1.9-2 million units shared by the organization with its vendors. The new projections account for the manufacturing loss due to the second wave impact & the chip shortage.
As per Suzuki Motors, the lack of semiconductors shall last until the end of FY 2021-22. Suzuki Motor Gujarat’s evaluates the loss due to production halt to be around 11,000-12,000 units, costing INR. 500-700 crore. Forcing the company to replan its September production.