Maruti expects production to pick up as chip supply improves

NEW DELHI: The country’s largest carmaker Maruti Suzuki India is expecting production activity to improve in the current quarter with gradual improvement in the supply of critical electronic components, a senior company official has said.

The auto major is also looking at ways, including bolstering its SUV portfolio, in order to get back to 50 per cent market share in the domestic passenger vehicle segment in the years ahead.

The company’s cumulative market share currently hovers around 44 per cent as it continues to struggle in the mid-size SUV segment, which has been growing at a fast clip. “An estimated 90,000 vehicles could not be produced during the third quarter owing to the global shortage of electronics components mostly corresponding to the domestic models. 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,” Maruti Suzuki India (MSI) CFO Ajay Seth said in an analyst call.

At present, MSI 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 noted that during the October-December quarter, the company continued to experience a shortage of electronic components, especially 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 explained.

MSI Senior executive director Shashank Srivastava said the situation has improved gradually from September 2021 when the company could only roll out 40% of its manufacturing target.