Maruti car production dips in August. And road ahead isn't looking good either

Maruti Suzuki reported a total passenger vehicle production of 111,368 units in the month of August, an eight per cent dip on a yearly basis. The country's largest car maker may now find the going this month getting tougher still owing to the problem of shortage in critical electronic components persisting.

Maruti Suzuki remains the leader, and by far, in terms of production and sales but the global shortage in semiconductor chip has already led the company to confirm production cuts this month. The shortage, however, is hardly a problem for Maruti alone as Mahindra too has confirmed production cuts and others are recognizing the challenge at hand.

Maruti continues to dominate the top-10 list of passenger vehicles sold with cars like WagonR, Alto, Swift, Vitara Brezza, Ertiga and XL6 continuing to fare well in comparative terms. The biggest dip in production came in the compact sub-segment which features WagonR, Celerio, Ignis, Swift, Baleno and Dzire. Maruti produced 47,640 units last month as against 67,348 units in the same month of 2020.

And while demand is expected to rise with the upcoming festive period, supply and production-related issues are likely to only increase for OEMs.

Globally, the shortage in semiconductor is being seen as a massive headache for car makers with top bosses of Daimler, BMW and Volkswagen predicting the issue to persist for a few years. Volkswagen CEO Herbert Diess recently said that he does not see a resolution any time soon. "The internet of things is growing and the capacity ramp-up will take time. It will be probably a bottleneck for the next months and years to come," he reportedly said.

With new-age cars increasingly equipped with more and more electronic component, the shortage is quite crippling. Some of the manufacturers in the US, quite alarmingly, are learnt to have opted to skip certain features in order to ensure that cars are rolled out as per demand.

(With inputs from PTI)