Semiconductor crisis hits Maruti Suzuki; production partially impacted

Maruti Suzuki’s production in August 2021 will partially be impacted at its contract manufacturing plant in Gujarat due to a global shortage of semiconductor chips. Production will be stopped on August 7, 14 and 21 and some of the production lines may see cut to one shift, instead of two, temporarily.

• Semiconductor shortage still affecting automotive industry
• Passenger vehicles use around 1,000 semiconductors
• Automotive sector not biggest market for semiconductors

Global semiconductor shortage

As per a regulatory filing on the exchanges, “As the situation is dynamic and uncertain, the company will monitor and take a day-to-day decision on models, lines or shifts to optimise resources for maximum efficiency."

Globally, the semiconductor shortage is leading to headwinds across the automotive industry well into the second half of 2021. The problem stemmed from increased demand for personal computers, tablets and smartphones at the height of the COVID-19 pandemic, which largely diverted supply away from the automotive sector.

A passenger vehicle typically uses around 1,000 semiconductors and any slowdown in the supply chain results in manufacturing coming to a grinding halt.

Suzuki Motor Gujarat (SMG), a subsidiary of Suzuki Motor Corporation, supplies fully-built cars to Maruti Suzuki for its domestic and export market needs. In October 2020, SMG became the fastest production site for the passenger vehicle major to achieve an accumulated automobile production capacity of 1 million units. The total production capacity at SMG’s plant A, B and C is over 750,000 units.

Maruti Suzuki India sales

As far as sales are concerned, with 1,33,732 units of vehicles sold in July 21, Maruti Suzuki inched closer to its July 2018 sales level of 1,52,427 units. On a month-on-month basis too, MSIL registered an uptick of 7.60 percent over the 1,24,280 units sold in June 2021.

Meanwhile, speaking of upcoming launches, Maruti Suzuki is lining up a slew of model updates, apart from the all-new Celerio’s market launch slated to take place in the coming months.