Indian Mahindra sees production of seven cars down by a quarter due to chip shortage


An employee works inside the Mahindra & Mahindra manufacturing plant in Chakan, India on September 30, 2016. REUTERS / Danish Siddiqui / File Photo

BENGALURU, Sept. 2 (Reuters) – Indian automaker Mahindra and Mahindra Ltd (MAHM.NS) on Thursday said it expects a 20% to 25% drop in vehicle production in September due to shortages in semi- drivers, following supply chain disruptions due to the pandemic.

Global automakers have been hit by chip shortages and have warned of further pain due to stiff competition from the consumer electronics industry for semiconductor shipments.

Mahindra said its revenue and profits will be affected by lower production volumes, while its production of tractors, trucks, buses and 3-wheelers has not been affected.

The company will have about seven “days without production” at its auto division factories this month, the company said in a filing.

Earlier this week, Maruti Suzuki India Ltd (MRTI.NS), the country’s largest automaker, said it expected production at its factories in Haryana and Gujarat states to be affected. in September due to semiconductor shortages. Read more

Indian automakers reported August sales on Wednesday, with most of them recovering from the previous year.

However, Mahindra’s passenger vehicle sales in August were down 24%, Maruti sales fell 22.8%, and Tata Motors Ltd (TAMO.NS) sales were down 7.2% year-on-year. monthly.

Globally, Ford Motor Co (FN), Honda Motor Co Ltd (7267.T), General Motors Co (GM.N) and Volkswagen AG (VOWG_p.DE), have been caught off guard by a prolonged global shortage of fleas, forcing many to slow down or reduce production.

In July, Tata Motors warned that it expected the second quarter chip shortage to be greater than the first. Read more

Due to shortages and rising prices, automakers have focused on manufacturing high-margin models and passed some of the costs on to customers. Maruti has increased its prices four times this year, while Tata Motors and Mahindra have also increased their prices.

Mahindra shares fell 1.5% on Thursday as a result of the update, but recouped some of the losses at 5:40 am GMT.

Reporting by Chandini Monnappa in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.


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