Like all the automakers around the world, Maruti Suzuki too is feeling the heat of the shortage of semiconductors. The largest automaker of India has announced that it will reduce its production capacity to 40 per cent at all of its manufacturing plants. Currently, Maruti Suzuki has three production plants in India – two in Haryana and one in Gujarat.
Maruti Suzuki has released an official statement in a recent filing, which says that because of supply constraints of electronic components due to worldwide shortage of semiconductor chips. It has slowed down the series production of cars in all of its plants in India. To balance it out, the company will be reducing its production capacity to 40 per cent in all of its plants for September.
The expected effect of this move:
The shortage of semiconductors has reduced the production capacity of almost all automakers around the world. It is one of the adverse after-effects of COVID-19, which has affected supply chain management very badly.
With this move of reducing the production capacity to 40 per cent, Maruti Suzuki might witness the lowest-ever monthly production of vehicles since 2014. It does not include the months of May and June 2021, when the whole nation went under lockdown and carmakers produced negligible vehicles at their production capacities.
This move is also going to significantly affect its quarterly production. Since the last 21 quarters, the current quarter has witnessed the lowest production number. It is because Maruti Suzuki already had revised the production process in the previous two months as well.
Maruti Suzuki suffers from a loss of Rs 500 crore in its revenues for every shortfall of 10,000 units in its monthly production. This decision has come just before the beginning of the festive season when the car buying sentiment is the highest in a year. It will surely affect the monthly sales figures of Maruti Suzuki, which are expected to drop down significantly for September
Current plans of Maruti Suzuki:
Maruti Suzuki is all set for its big-ticket launch for the festive season, in the form of the all-new second-generation model of Celerio hatchback. The compact hatchback has already been spied a few times and seems to have undergone a complete change in its design.
The new Maruti Suzuki Celerio is expected to come with both 1.0-litre petrol and 1.2-litre petrol engine options, with both 5-speed manual and 5-speed AMT gearbox options. The new Celerio will take on cars like Tata Tiago, Hyundai Santro and Datsun Go.