Maruti Suzuki expects chip shortage to continue for few more quarters

Maruti Suzuki India has already witnessed a production loss of close to 46,000 units due to the shortage.
| Photo Credit: PTI

Maruti Suzuki India expects semiconductor shortage to continue for the next few quarters leading to a further increase in order backlog of certain models, according to a senior company official.

The country’s largest carmaker has seen its pending bookings stretch to 3.69 lakh units with Ertiga leading the pack with close to 94,000 bookings.

Other models like Grand Vitara and Brezza have an order backlog of around 37,000 and 61,500 units, respectively.

Further, the company has received around 22,000 and 12,000 bookings, respectively, for Jimny and Fronx.

Due to the chip shortage, Maruti Suzuki India (MSI) has already witnessed a production loss of close to 46,000 units in October-December period and is expecting some impact on the production in the ongoing quarter as well.

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“The semiconductor shortage still continues. Last quarter we lost 46,000 units due to this issue and this quarter also the problem continues for a few models,” Maruti Suzuki India Senior Executive Officer (Marketing and Sales) Shashank Srivastava told PTI in an interaction.

The company expects the shortage to continue for a few more quarters, he noted.

“It is difficult to predict exact timelines when it will become normal because the visibility is not there,” Mr. Srivastava said.

Commenting on the overall PV industry, he noted that the sports utility vehicle continues to lead with a share of 42.6% and hatchbacks accounting for 35%.

“So far the passenger vehicle industry this fiscal year has witnessed sales of 35.5 lakh units. It seems the industry will end the year with 38.8 lakh units mark, the highest ever number till date,” he said.

Last fiscal, the number stood at 30.7 lakh units, so the sales are expected to go up by around 26% this financial year.

He noted that the PV segment is expected to post a growth of 5-7% in the next fiscal year over 2022-23.

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“Post the repo rate hike many banks have increased the loan rates…the rates are clearly going up and that obviously has an impact on the overall demand,” he stated.”Next year our projections are between 40.5-41 lakh units which is roughly a growth of 5-7%,” Mr. Srivastava noted.

MSI is expected to perform better than the industry, he said adding that the market is witnessing some impact on demand with increase in vehicle loan rates.

Mr. Srivastava noted that there were also certain positive factors helping mitigate the negative factors in the market.

”If the economy continues to grow, the impact may not be that severe…government spending on infrastructure has an overall positive impact on the demand scenario,” he said.

On Jimny and Fronx, Mr. Srivastava noted that the production of the models would commence later this month in Gurugram and Gujarat respectively.

The overall passenger vehicle wholesales crossed the 3.35 lakh unit mark in February. It was also the highest-ever overall dispatches by companies to dealers in the month of February.

MSI’s domestic wholesales rose 11% to 1,55,114 units in February as compared with 1,40,035 units in the same month last year.

The auto major has already dispatched 15.08 lakh units in the current fiscal so far, a growth of 23% from 12.27 lakh units in April-February period of last financial year.