Maruti Suzuki production to be partially impacted in Aug due to semiconductor shortage

Maruti Suzuki said on Wednesday that its production will be partially impacted in August due to semiconductor shortage. Production at its contract manufacturing company Suzuki Motor Gujarat Private Limited (SMG) will be impacted on three Saturdays. The auto giant said that the company will take a day-to-day decision on models to optimise resources.

“This is to inform you that owing to the semiconductor shortage situation, the company has been informed by its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG), that production will be partially impacted in this month. SMG will tentatively not carry out production on the three Saturdays (7th, 14th and 21st August),” said the company in a filing.

It further added, “In addition, some of the production lines may see temporary reduction from 2-shift to 1-shift working. As the situation is dynamic and uncertain, the company will monitor and take a day-to-day decision on models, lines or shifts to optimize resources for maximum efficiency.”

SEMICONDUCTOR SHORTAGE

It is not only Maruti Suzuki or India that has been impacted by shortage of semiconductors. The global economy is feeling the intense impact of reduced supply. This shortage occurred following an increase in demand as people, locked indoors, were spending on home offices, television, game consoles and so on amid the pandemic.

The dearth of these miniscule components that are the basic building blocks of computers, allowing electronic devices to process data, also came about due to temporary factory closures that put added pressure. As and when companies opened, the large backlog of orders by electronic goods producers had to be cleared.

Additionally, a storm also halted production in several plants in Texas in February, and a fire devastated a Japanese factory in March, as mentioned in a report in AFP.

Moreover, amid US-China tensions, Huawei began stockpiling semiconductors as the US banned foreign companies whose chips use American technology from selling to the tech giant. Many other companies followed its lead too, further straining supplies.

The auto industry has been mostly impacted. Due to lack of demand, automakers slashed productions, leading chip suppliers to turn to other sectors. Now that car demand has ramped up, companies are struggling to get hold of semiconductors.

Smartphone makers have also started to gradually feel the impact of the shortage.

Also read: Maruti Suzuki logs 50% rise in July sales, sells over 1.6 lakh units
Also read: Maruti Suzuki to launch EVs by 2025; India to be first country to see new electric car