Semiconductor shortage to hurt Maruti Suzuki sales in August; Swift, Dzire, Baleno production hurt

Maruti Suzuki, the country's largest car maker, volumes in August will be hit because of the shortage of semiconductors. The company's sister arm - Suzuki Motor Gujarat is moving production from two shifts to one shift for its hot selling models - Baleno, Swift and Dzire from 4^th of August to 11^th of August.

According to people in the know, this will lead to a loss of 11000 to 12000 units or Rs 500-700 crore of revenue loss during the month of August. Not only are these models the fast selling models, but also are high on margin.

The production is likely to move to one shift in the coming week till the supplies are restored from the 12th of this month.

Maruti Suzuki was compelled to revise production volumes for June from 1.99 lakh to 1.71 lakh due to the shortage of parts, now for the month of August, the company has again revised its production plan from 1.72 lakh to 1.57 lakh and this is largely on account of shortage of semiconductors.

The company was however able to meet its production plan for July to almost 99%. The shortage is expected to persist in September too and the company has also revised its production plans for September on the lower side by about .

The company in an official statement to Bombay Stock Exchange said owing to the semiconductor shortage situation, its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG), that production will be partially impacted in August.

"SMG will tentatively not carry out production on the three Saturdays (7th, 14th and 21st August). In addition, some of the production lines may see temporary reduction from 2-shift to 1-shift working. As the situation is dynamic and uncertain, the company will monitor and take a day-to-day decision on models, lines or shifts to optimize resources for maximum efficiency," added the statement.

The Indian passenger vehicle hurt cumulatively is set to witness a hit of close to 1 lakh units in Q2 of FY-22 and the market may witness revenue of about Rs 10,000 crore, further extending the waiting period for high in demand models.

It is not Maruti Suzuki alone, the likes of Hyundai, Tata Motors, Mahindra have been dealing with the shortage and are adopting innovative ways to source more and produce.