Maruti Suzuki, the country's largest car manufacturer, is to produce 50-60 thousand lesser cars this month. This could impact the company's revenue by up to Rs 2500-3000 crore.
Lack of semiconductors is cited as the reason behind the fall in production. The shortage of semiconductors remains a major problem around the world which is unlikely to be resolved in the near future.
According to ET Auto, Maruti Suzuki's decline in car production may cause a shortage of popular car models during this festive season. The demand for vehicles increases considerably during festivals, which is just around the corner.
The company's Manesar plant may only produce 45,000 cars in August. The plant usually produces 65,000 cars every month. Although small cars are manufactured at the Gurugram plant, the impact of this would be less evident there.
Maruti Suzuki manufactured 170,719 units in May and 165,576 units in June 2021. This has taken production to a total of 537,174 in the first four months of the financial year alone. The company may produce 150,000 units fewer vehicles in the July quarter.
The company had 170,000 pre-orders at the time it announced its June quarter results, proving that sales are going to be affected to a great extent.
Many auto companies have increased the price of their cars thrice this year due to the rising price of essential materials. The decline in semiconductors could drastically reduce the profit margins for many automobile companies, including Maruti Suzuki, this year.
Maruti Suzuki customers may also face difficulty in receiving delivery of their pre-ordered vehicle due to a decline in production. They would surely be getting their delivery much later than expected.
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