Maruti Suzuki Says Chip Shortage Limiting Production Volumes; 51,000 Vehicles Not Produced in June Quarter

Maruti Suzuki could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation, according to a senior company official. The country's largest carmaker, which sold a total of 4,67,931 vehicles during the June quarter, noted that the semiconductor shortage is a challenge in planning its production activities. "The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles," Maruti Suzuki India (MSI) CFO Ajay Seth said in an analyst call.

Limited visibility on the availability of electronics components is a challenge in planning our production, he stated.

Seth noted that the company's supply chain, engineering, production and sales teams were working towards maximising the production volume from available semiconductors.

"The supply situation of electronic components continues to remain unpredictable," he lamented.

With demand remaining robust, the company's pending order backlog has touched the 3.5 lakh unit mark.

Seth further stated that input cost pressure, led by the increase in commodity prices, was another challenge that the company faced during the June quarter.

"The company has always strived to provide mobility to masses and continued to work on focused cost reduction efforts to limit the impact of commodity inflation on selling prices," he said.

MSI Executive Director (Corporate Planning and Government Affairs) Rahul Bharti said the orders for new Brezza and Grand Vitara were nearing the one lakh units.

"Going forward, the company will strive to further strengthen its SUV portfolio to dominate the SUV segment, just like all other segments," he said.

The company's sales in the last quarter were driven mainly by compact cars, including Baleno, Celerio, Dzire, Ignis, Swift, Tour S, and Wagon R, which rose to 84,818 units in July 2022 from 70,268 units in the year-ago month.

Sales of mini cars — comprising Alto and S-Presso — grew to 20,333 units last month, up from 19,685 units in July 2021. However, sales of utility vehicles — including Brezza, Ertiga, S-Cross, and XL6 — were lower at 23,272 units compared to 32,272 units.

"The overall industry sales stood at over 3.42 lakh units last month as compared with 2.94 lakh units in July 2021. This is the highest wholesale figure we have ever seen in the industry," MSI India Senior Director (Marketing and Sales) Shashank Srivastava told PTI.