Tata Motors, India’s third largest passenger vehicle maker, produced 15 per cent lesser number of cars and SUVs in April due to shortage in supply of semiconductors.
The ongoing quarter is expected to remain challenging for Tata Motors, which closed last financial year with the best sales since its inception.
It clocked sales of 41,587 units during April, including 2,322 electric vehicles. April sales were down compared to March when Tata Motors had sold 42,293 units, including 3,357 electric vehicles.
Speaking at a post-earnings call, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility said, “We have been growing month-on-month as far as our supplies are concerned and we were able to meet the figure of 41,000-42,000. But in terms of what we could have produced based on the capacity and the order book we have, I would say we have incurred a loss of 10-15 percent due to the supply constraints we faced in April.”
Strong order book
Tata Motors, however, claims to have a strong order book with an average waiting period of three months. Sources say the company is sitting on an order bank of around 1,50,000 units despite increasing sales and production by 40 per cent in under five months.
The company is undertaking capacity debottlenecking actions to unlock the ‘next phase of growth’. Tata Motors is targeting production of close to 50,000 units a month through debottlenecking efforts.
The supply of semiconductors which had began its revival in Q4 of FY22 was affected by the Russia-Ukraine war. Certain raw materials for producing semiconductors have to be procured from Russia and Ukraine which are now facing uncertainty due to the war.
The chip supply shortage has affected car market leader Maruti Suzuki more severely than others. During FY22, Maruti Suzuki claimed to have lost 2,70,000 units in production due to the supply chain shortages. Automakers say that uncertainty over chip availability will continue for the entire first half of the financial year but should start easing out by December this year when incremental supply starts to hit the market from new capacities created previously.