Maruti to cut production to 40% in September

The country’s largest passenger vehicles manufacturer, Maruti Suzuki India Ltd (MSIL) on Tuesday said that it would produce around 40 per cent of its normal production, across all plants, including the Suzuki Motor Gujarat (SMG) facilities from where it buys vehicles and sells in the domestic market.

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“Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the company is expecting an adverse impact on vehicle production in the month of September in both Haryana and its contract manufacturing company, SMG in Gujarat,” the company said in stock filings. “Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 40 per cent of normal production,” it said.

Limited production

Speaking to BusinessLine on Monday, Shashank Srivastava, Senior Executive Director (Marketing & Sales), MSIL had said that the demand and supply of the cars are reflective of the semiconductor shortages. “This have been a month (August) where we had some limited production because of the semiconductor shortages and that has been one constraint. But, we are still trying to push as much as possible as always,” he had said.

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Earlier in August, SMG had no production days on three Saturdays (August 7, 14 and 21), thereby impacting the sales of MSIL. Meanwhile, the company had also announced of price hikes across models from September amid rising input costs. This is the fourth price hike in this calendar year since January. The company in January had increased the prices by 1.6 per cent across all categories, then in April by 1.9 per cent and in July only on CNG vehicles by 0.4 per cent.

“Commodity prices are quite high since April 2020. For instance, the prices of steel have gone up from ₹38,000 per tonne, last year, to ₹65,000 per tonne, today. Similarly, copper price rose from $6,200 per tonne to $10,200 per tonne now, while the prices of rhodium and palladium over the last one year have also gone up multi-fold,” Srivastava said.

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Although the company did not give any quantum of the price increase, sources had said the range starts around ₹5,000-22,000 across models. The domestic automobile manufacturers are facing a tough situation following the shortage of semiconductors, and now more worried due to the lockdown in Malaysia, which is one of the largest chips suppliers.

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