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India’s largest carmaker Maruti Suzuki’s output might fall further in September owing to the shortage of semiconductors across the globe and lockdown in Malaysia. Carmakers across the globe, including Indian majors, are facing problems in production due to the shortage of semiconductors for the last few months due to the crisis induced by the Covid-19 pandemic.
The supply of vehicles like Vitara Brezza, Swift and other models might be disrupted ahead of the festive season as Maruti is forced to slash the production, according to a report in Business Today.
The overall impact of this shortage in the month of August is pegged at approximately 50,000 units or around 20-25% of the monthly output, which translates to a loss of $500 million in terms of turnover for all Indian carmakers, as per a report in The Economic Times.
Lowest output by the carmaker
Maruti Suzuki is expected to produce around 60,000-90,000 vehicles in September, which is 40-60% lesser than its peak monthly output, as per the media report. Maruti Suzuki’s output is anticipated to be the lowest since 2014, excluding the lockdown riddled months of March-April in 2020 and May-June this year. The ongoing July-September quarter is expected to see the lowest output by the carmaker in 21 quarters.
Longer waiting time anticipated
With the global chip shortage on one hand and rising demand for cars on the other, customers might need to wait for long periods to get their vehicles delivered. It also means that discounts and freebies will now no longer be offered. As of now, the waiting time for cars is in the range of 1.5 months to four months, depending on the city, model and variant. As per auto dealers and car company officials, the wait could be extended to six to nine months and there are chances of it spilling over to 2022 once the festive season peaks and demands surge.
The chip shortage may play a spoilsport this year and the festive season might take a hit due to the fears of a potential third wave and a deficient monsoon. The Onam kicked off the festive season on a good note with the company clocking close to 800 bookings a day on an average as compared to 500 last year, but still falling short of the 2019 figures of over 1000 bookings a day, a media reported quoting Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki.