M&M to slash output by 25% due to the shortage of chips
NEW DELHI: Mahindra & Mahindra on Thursday said the output at its automotive division will be cut by up to 25% owing to no production days of around seven days across its plants due to semiconductor shortage.
In a regulatory filing, the company said its automotive division continues to face a supply shortage of semiconductors, which further accentuated due to Covid-19 lockdowns in some parts of the world.
“Consequently, the company will be observing ‘No Production Days’ of around 7 days in its automotive division plants in the month of September 2021,” it added.
The move is estimated to result in a “reduction in production volumes of the automotive division in September 2021, by 20-25%”, it added.
In August, the company sold 15,973 units of passenger vehicles in the domestic market, as against 13,651 units in the same month last year, a growth of
17%.
M&M’s automotive division has manufacturing units at Chakan, Nashik, Kandivali, Zaheerabad and Haridwar.
The company, however, said there will be no impact on the production ramp-up and launch plans of its new SUV XUV7OO. “The date of commencement of bookings will be announced soon,” it added.
M&M also said its tractor operations, exports, trucks and buses business and threewheeler production are “unaffected
by the above disruption”.
“As the situation is dynamic, the company is carefully reviewing the supply situation and all efforts are being made to minimise the impact,” the filing added.
Earlier, the country’s largest carmaker Maruti Suzuki India (MSI) had said it expected its total vehicle production in September across its plants in Haryana and parent Suzuki’s unit in Gujarat to be just 40% of the normal output due to the semiconductor shortage.