India's Top Carmaker Maruti Suzuki Sees Decline in Production Due to Global Chip Shortage

© AFP 2023 / SAM PANTHAKYIndian students at the 'Japan-India Institute for Manufacturing' (JIM) attend the workshop supported by Maruti Suzuki India Ltd., at Ganpat University in Kherva, some 85km from Ahmedabad, on July 4, 2018
Indian students at the 'Japan-India Institute for Manufacturing' (JIM) attend the workshop supported by Maruti Suzuki India Ltd., at Ganpat University in Kherva, some 85km from Ahmedabad, on July 4, 2018 - Sputnik International, 1920, 01.10.2021
The acute shortage of chips has badly affected the automotive sector across the globe. In India, companies have been forced to slash production to secure limited semiconductor supplies.
The Indian car manufacturing company, Maruti Suzuki, on Thursday announced that it is expecting a decline in total vehicle production in October due to a shortage of semiconductors.
According to the carmaker, the production volume at two of its plants - Haryana and Gujarat - is expected to be around 60 percent of normal levels.

"Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the company is expecting an adverse impact on vehicle production in the month of October' 21 in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG) in Gujarat", Maruti Suzuki stated on Thursday.

"Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 60% of normal production", it added.

Meanwhile, Maruti's competitor, Mahindra and Mahindra, has also warned of reduced production in September due to the chip shortage.
On Friday, Maruti reported a 46.16 percent decline in sales at 86,380 units in September. As per the company's statement, it sold 160,442 units in September 2020.

"The sales volume of the company in September 2021 was adversely impacted due to the shortage of electronic components. The company took all possible measures to limit the adverse impact", the firm stated.

According to reports, the COVID-induced crisis in the Indian automotive sector has forced carmakers to focus on high-margin models and the majority of Indian manufacturers including Maruti, Tata Motors, and Mahindra to increase the prices multiple times this year.
Reportedly, Maruti Suzuki is the worst affected due to the chip shortage as the company has scaled down its production activity due to the scarcity of components in the last two months.
The chip shortage has not just affected India but the whole world. After a sudden surge in demand for electronic items like laptops and phones, the shortage of chips increased.
A Kunpeng 920 chip is displayed during an unveiling ceremony in Shenzhen, China, Monday, Jan. 7, 2019. Chinese telecom giant Huawei unveiled a processor chip for data centers and cloud computing as it expands into an emerging global market despite Western warnings the company might be a security risk.  - Sputnik International, 1920, 27.09.2021
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Meanwhile, international players like Ford Motor Co, Honda Motor Co Ltd, General Motors Co, and Volkswagen AG have also been hit by the chip crunch and forced to curtail production.
Sputnik reached out to the spokespersons from the Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association of India (ACMA) for comments but hadn't received a response by the time of publication.
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