Chip shortage: M&M to go for 'No production days' in Sept
Automobile manufacturer Mahindra and Mahindra will observe seven 'No Production Days' in September due to the supply shortage of semiconductors.
The company said that its automotive division continues to face shortage of semiconductor supply, "which has got further accentuated due to the Covid-induced lockdowns in some parts of the world".
The company estimates reduction in production volumes by 20-25% as a result of the 'No Production Days'.
"The revenue and profitability will be impacted in line with the fall in production volumes. The company is taking various cost optimisation measures to limit the impact," the automobile manufacturer said in a regulatory filing on Thursday.
The company also said that there will be no material impact on XUV7OO production ramp-up and launch plans.
"The date of commencement of bookings will be announced soon," it said.
The company's tractor operations, exports, trucks and buses business and three-wheeler production will be unaffected, it said.
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 three-wheeler 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 on Tuesday, 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.