Case Study | Chip shortage: Maruti’s production dips

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Maruti Suzuki Alto (red car)
Maruti Suzuki Alto (red car)

India’s largest automaker, Maruti Suzuki, said that its net production in August dropped by 8%. It dipped on a yearly basis to 113,937 units due to the impact of chip shortage in the manufacturing plans.

The year before that, the company manufactured a total of 123,769 units, said Maruti Suzuki India (MSI) in a regulatory filing.

Due to a components shortage, the manufacturing total of the company in August 2021 was affected fiercely. Semiconductors are silicon chips that enable memory and control functions in items ranging from cell phones, computers, and automobiles to other different electronic products.

Semiconductors’ usage in the automobile industry has risen recently across the world. New models of semiconductors are coming with more loaded electronic features like Bluetooth connectivity and driver-assist, navigation, and hybrid-electric systems.

MSI reported that last month their total passenger vehicle production was at 111,368 units compared to 121,381 units in the same month last year. That was similar to the amount of manufacturing of mini cars like Alto and S-Presso, which stood at 20,332 units in August compared to 22,208 units a year ago.

Again, this was the case with compact cars like Celerio, WagonR, Swift, Ignis, Dzire, and Baleno and utility vehicles like Gypsy, Vitara Brezza, S-Cross, Ertiga, and XL6.

The production of its light commercial vehicle Super Carry was at 2,569 units last August against the 2,388 units last year.

However, the company reported a rise in the manufacturing of its Eeco van at more than 10,000 units in August 2021 compared to almost 9,000 units in the same month last year.

But, that was the only bright side for them. Will that make it any better?

MSI reported a 58% surge in net production in July on a yearly manner of 170,719 units. On August 31st, across its plants in Haryana and Gujarat, the automobile giant declared its anticipated total vehicle manufacturing in September to be only 40% of the usual output due to the chip shortage.

Maruti’s manufacturing capability at Gurgaon and Manesar plants in Haryana is almost 15 lakh units per year. Other than that, Suzuki Motor Gujarat (SMG) has an extra installed manufacturing capability of 7.5 lakh units per year.

SMG also announced it would dip the production activities in August at its plant in Ahmedabad due to chip shortage. SMG supplies cars to MSI exclusively.

All the units manufactured at SMG are offered to MSI. SMG also planned to narrow down production to a single shift at some manufacturing lines in the plant.

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