Mahindra plans to cut production due to a shortage of chips

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India’s global semiconductor crisis worsened ahead of the holidays, halting car production in August 2021. The crisis continued until September, and Maruti Suzuki recently announced that production had been cut by 60% due to a “shortage of chips”.

Mahindra announced similar measures previously impacted by the semiconductor crisis, a 20-25% decline in XUV700 production since September, a no-launch program, and a 10-month wait.

Mahindra, September production choke:

In a regulatory statement, the company says: Accordingly, factories in the automotive sector will have a “day off” around September 7, 2021, which is expected to cut production by 20-25%. A decline in production affects profitability and profitability. The company has taken several cost optimization measures to limit its impact.

But Mahindra didn’t let the semiconductor crisis derail its next flagship, the XUV700. Plans for the production and launch of the XUV700 are going well. Mahindra will announce a start date for the discussion soon. Mahindra’s truck and tractor business were also unaffected by the crisis.

Current production time of Mahindra SUVs:

Mahindra recently experienced a surge in demand for some models, which was exaggerated due to a shortage of chips. In early August, the company announced that it had completed nearly 90,000 orders for five products: Tar, XUV300, Scorpio, Bolero, and Bolero Pickup.

As for resin, the lead time is about 10 months and the number of orders is over 39,000, but the XUV300 is over 10,000 and the lead time is around 2 months. In August, Scorpio had over 6,000 orders with a wait time of 45 days, while Bolero had over 4,000 orders.

Bolero Pickup recorded over 30,000 orders in the first quarter of 2022, driven by increased demand from the e-commerce boom and demand for long-distance delivery services.

The auto industry is losing Christmas sales:

It was a pivotal moment at a very inopportune time when the Indian auto industry was optimistic about the recovery from falling sales in the upcoming Christmas season, which kicks off this month.

Gulati, chairman of the Federation of Indian Automobile Dealers Associations (FADA), said the problems in the chip supply chain will increase, and demand for the holiday season will increase.

“We are in the midst of the Christmas season. It might help, but the supply chain is a big problem in the photovoltaic sector. The presence of diesel fuel is the hardest hit. But slowly and surely, almost every manufacturer is on the right track said, Gulati”.