Maruti Suzuki India predicts semiconductor shortage to increase order backlog

Maruti Suzuki India has said that the prevailing semiconductor shortage in the market can further increase the backlog of orders for certain models. According to a recent announcement by a Maruti Suzuki India (MSI) official, the semiconductor shortage that caused a production loss of 46,000 units in the previous quarter is likely to increase the backlog of orders for certain models, like Ertiga, and Brezza.

The official expects the problem to persist over the next few quarters, with the pending bookings potentially stretching to 3.69 lakh units.

Among the models with the longest waiting lists, the Ertiga leads the pack with close to 94,000 bookings, followed by the Grand Vitara and Brezza, which have order backlogs of around 37,000 and 61,500 units, respectively.

Additionally, the company has received around 22,000 and 12,000 bookings for the Jimny and Fronx models. The semiconductor shortage has been an ongoing issue for the company, causing a loss of close to 46,000 units in the last quarter, and is expected to impact production in the ongoing quarter as well.

Despite the semiconductor shortage, Shashank Srivastava, an MSI official, expressed confidence in the growing demand for MSI vehicles in the market. He noted that the passenger vehicle (PV) segment is expected to grow by 5-7 per cent in the next fiscal year over 2022-23, with sports and utility vehicles continuing to lead the industry with a maximum share of 42.6%. Hatchbacks are expected to be the runner-up with a 35 per cent share in the industry.

"The semiconductor shortage still continues. Last quarter we lost 46,000 units due to this issue and this quarter also the problem continues for a few models," Maruti Suzuki India Senior Executive Officer (Marketing and Sales) Shashank Srivastava told PTI.

Srivastava also mentioned positive factors that could help maintain market momentum, such as the promising growth of the Indian economy and the government's spending on infrastructure. However, he acknowledged that the rising vehicle loan rates due to the RBI repo rate hike and inflation could impact overall demand. Despite these factors, he expects MSI to perform better than the industry, projecting the company's sales for next year to be between 40.5-41 lakh units, representing roughly 5-7 per cent growth.

In terms of the automaker's performance, MSI's domestic wholesale data showed an 11 per cent increase in February, with 1,55,114 units sold compared to 1,40,035 units in the same month last year.

The auto giant has already dispatched 15.08 lakh units in the current fiscal year, marking a 23 per cent growth from the 12.27 lakh units in the April-February period of the previous financial year.