Due to the partial suspension of the Gujarat facility for a few days, August output is likely to be lower than July. Maruti Suzuki hikes rates for all models but has not defined the rate at which these price increases will take effect next month.
Due to a lack of semiconductors, Maruti Suzuki, India’s largest carmaker, will slash production by 60% in September. This is the company’s second straight monthly decrease as a result of the chip scarcity.
“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 September in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat in Gujarat,” Maruti Suzuki (MSIL) said in an exchange filing.
“Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 40 per cent of normal production,” MSIL added.
MSIL did not define its regular production levels, although the company’s and SMG’s combined output in July was 170,719 units. Due to the partial suspension of the Gujarat facility for a few days, August output is likely to be lower than July.
Due to the semiconductor shortage, contract manufacturing business Suzuki Motor Gujarat (SMG) announced on August 4 that it will shut down operations for three consecutive Saturdays in August and may reduce work to just one shift.
Maruti’s output-related guidance for September comes as the company prepares to implement a significant price rise beginning in September. This will be the car industry leader’s fourth price rise since January 2021.
“We wish to inform you that over the past year the cost of the Company’s vehicles continues to be adversely impacted due to an increase in various input costs. Hence, it has become imperative to pass on some impact of the additional cost to the customers through a price rise,” the company said.
Maruti Suzuki hikes rates of cars and all models will see a price increase as of September 2021.
Maruti Suzuki has not defined the rate at which these price increases will take effect next month but this makes it the fourth time it has increased prices in 2021. This price increase is owed to rising input costs.
Currently, the company sells a variety of automobiles, ranging in price from Rs. 2.99 lakh to Rs. 12.39 lakh, ranging from the entry-level hatchback Alto to the S-CROSS (ex-showroom prices Delhi).
According to dealers, Maruti’s current inventory with its dealers is lower than demand. The September reduction in output will exacerbate supply issues, lengthening the waiting period for models. With no production cut guidance from Hyundai, Kia, or Tata Motor, Maruti Suzuki’s market share is projected to be under pressure, at least at the wholesale level.
Despite the shortage of semiconductors, MSIL had been able to keep production running well until the end of July. Due to the chip scarcity, its competitors Mahindra & Mahindra (M&M), MG Motor, and Ford India also had to reduce output.
