Finace And Stock

Maruti Suzuki drops on production fall projection

NEW DELHI: Shares of Maruti Suzuki India, the country’s largest car manufacturer, dropped in early Mumbai trading on Friday, after the company said it expects a negative impact on production at its two plants in Haryana and Suzuki’s plant in Gujarat this month because of acute semiconductor shortage.

At 09:30 hours (IST), shares of Maruti Suzuki traded at Rs 7,184, down 2.10% on the National Stock Exchange.

The auto giant said on Thursday that overall production at its manufacturing plants would be 60% of normal production in October, taking the average production in September and October to 50%.

October would be the second consecutive month in which Maruti would be facing pressure on production on account of shortages in semiconductors.

In July, the total output of Maruti and Suzuki Motor Gujarat, which is Maruti’s parent company, stood at 1,70,719 units.

The projected fall in output comes at the worst possible time for the carmaker as the festive season in India – which is a time which typically sees a rush in demand – is about to commence in earnest this month.

Moreover, rival carmakers such as Tata Motors and Mahindra and Mahindra are going ahead with their normal production schedules.

The shortage in semiconductor chips is a global phenomenon caused by disruptions in supply chains and a rise in demand for electronic components.

The Consumer Electronics and Appliances Manufactures Association recently said the appliances and consumer electronics industry sees the shortfall in components spilling over to 2023.

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