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'No production days': Mahindra sees production hit in September due to chip shortage

The company stated that the disruption did not affect its tractor operations and exports, trucks and buses business, or 3-wheeler output.

Mahindra sees production hit in September due to chip shortage gcw
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New Delhi, First Published Sep 2, 2021, 1:36 PM IST
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Due to semiconductor shortages, Indian automaker Mahindra & Mahindra estimates a 20 per cent to 25 per cent decrease in September vehicle output at its automotive business. Semiconductor shortages have impacted carmakers worldwide. They have been told that more pain is on the way owing to intense competition for chip supply from the vast consumer electronics industry. This month, Mahindra would observe 'no production days' of roughly seven days in its automotive division factories, according to an exchange filing.

Mahindra stated that the drop in manufacturing levels would have an impact on company revenue and profitability. Following the output data, Mahindra shares fell roughly 1 per cent. However, the company stated that the disruption did not affect its tractor operations and exports, trucks and buses business, or 3-wheeler output.

Also Read |  Mahindra Defence gets Rs 1,350 crore order for anti-submarine systems

According to media reports, a surge in Covid-19 cases throughout the world and spotty lockdowns in various world areas are creating a severe threat to chip and semiconductor supply. The problem is exacerbated by the fact that (semiconductor) chip stocks are already depleted in most areas worldwide. According to reports, input shortages and low supplies would likely result in production cutbacks and delayed shipments in the September 2021 quarter.

Because to the semiconductor scarcity, M&M reported total sales of 30,585 units in August, a 21.5 percent decrease from July. M&M's passenger car sales decreased 24 per cent in August, to 15,973 units.

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Maruti Suzuki, India's largest automaker, warned earlier this week that it expects production at its facilities in Haryana and Gujarat to be disrupted in September due to a lack of semiconductors.

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