Maruti Suzuki expects car production to improve as chip supply perks up

Maruti Suzuki hopes its production activity to smoothen in the current quarter as the supply situation of critical electronic components observes gradual improvement, informed a senior company official.

The auto major is also putting efforts to push its SUV portfolio to get back 50 per cent market share in the domestic passenger vehicle segment in the coming years. Maruti Suzuki India (MSI) CFO Ajay Seth said around 90,000 vehicles could not be manufactured during the third quarter due to the global semiconductor shortage mostly corresponding to the domestic models., reports PTI.

“Though still unpredictable, the electronics supply situation is improving gradually. The company hopes to increase production in Q4, though it will not reach full capacity," added Seth.

Currently, Maruti Suzuki has a cumulative production capacity of around 5.5 lakh units per quarter or about 22 lakh units per annum across its manufacturing plants in Haryana and Gujarat. Seth also shared the company during the October-December quarter experienced a shortage of electronic components, mainly during the festive period, when the demand for cars usually remains good. “The enquiry, bookings and retail sales in the third quarter have shown an improvement sequentially. Enablers such as finance availability and interest rates continue to remain favourable," Seth informed.

The company's Senior Executive Director (Sales and Marketing) Shashank Srivastava explained the semiconductor situation has improved gradually from September last year when Maruti could only roll out 40 per cent of its production target. “However, it is still not 100 per cent as you can see, and we are hopeful in January, February and March, we will continue to see this improvement hopefully to be above that 90 per cent mark...we may not reach 100 per cent," added Srivastava.

Coming to alternate mobility technologies, Srivastava said given the high upfront cost of batteries and the limited charging infrastructure network in the country, the automaker is of the view that at least for the medium-term hybrids will be a very powerful solution. “They are scalable, they do about 40 per cent of the job of an electric vehicle (EV) in terms of CO2 reduction, in terms of energy efficiency, but they're probably 100 times scalable. So in the medium term, they will be a good option. And of course EVs also have to be pursued for the long term. So all options have to be worked upon," he stated.