Shortage of semiconductors has stalled Skoda Auto Volkswagen India’s (SAVIPL) plans of starting the scheduled third shift at the Chakan factory in Maharashtra even as buyers line up to book four of its freshly launched cars.

The two European car brands are struggling to increase production due to limited supply of chips which are essential for powering a range of features in a car including entertainment systems, electronic control units, sensors and even airbags.

SAVIPL had planned to kick start the third shift – meaning the plant will operate 24x7 - for the first time in more than three years, from November onwards to maintain vehicle supplies in line with their demand. While Volkswagen has introduced the Taigun and Tiguan, its group brand Skoda Auto has launched the Kushaq and the Slavia. Cars of both the brands are produced at the common factory.

Ashish Gupta, Brand Director, Volkswagen Passenger Cars India said, “We are equipped to start the third shift at any time as soon as the supply situation improves. The outlook (on chip supplies) is not very positive and that’s the worrying part because the long term (production) planning stability is missing.”

While bookings for the Taigun currently stand at around 5,500 units a month, Volkswagen is able to supply only 3,000 units of the SUV every month. Customers are asked to wait for up to three months to take possession of the mid-size SUV. There is a waiting period on the Skoda Kushaq as well.

SAVIPL depends completely on allotments of semiconductors made by its German headquarters. VW has had to shut down production at some of its plants globally due to the shortage in chip supply. The peak production capacity, on a three-shift basis at SAVIPL’s Chakan plant is 750-800 cars a day.

“From production planning to delivery to the customer is a six month cycle. From production planning to actually producing the car is a 12-18 weeks process. You need that kind of an outlook to be able to back what you will deliver six months later. Right now, the planning stability is down to 2-4 weeks. That’s the complexity of the issue,” Gupta added.

VW on December 7 launched its second offering in three months with the introduction of the facelift Tiguan. The premium SUV, which will compete against the Citroen C5, Toyota Fortuner, MG Gloster and the Mahindra G4 Alturas will be imported in parts for assembly in India.

VW and Skoda Auto are among a host of auto companies who are struggling to spruce production even as the industry sits on pending orders of more than 5 lakh units. Market leader Maruti Suzuki warned a week ago that production for December would be 80-85 per cent of the normal levels. Hyundai, Kia, MG Motor, Mahindra & Mahindra and Renault had to enforce production cuts due to the chip shortages.

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