Maruti Suzuki expects production loss in Q1; anticipates some relief from July

Maruti Suzuki India expects production loss to continue in the first quarter with some relief anticipated in the July-September period as it continues to grapple with the shortage of electronic components, according to a senior company official. The country’s largest carmaker has been facing a shortage of chips for a while which has impacted its supplies to cater to the market demand.

“We lost 1.7 lakh units last fiscal. Our loss in the third quarter of the last financial year was around 45,000 units. Similarly, we lost around 38,000 units in the fourth quarter,” Maruti Suzuki India (MSI) Senior Executive Officer (Sales and Marketing) Shashank Srivastava said in an interaction.

With demand outpacing supply, the auto major has seen its pending order book stretch to over 4 lakh units with Ertiga leading the pack with close to 1 lakh bookings.

Srivastava noted that with the current supply situation, the company incurred a production loss in April and anticipates a similar situation to repeat in May and June as well.

“In May, there is a loss and it is expected that we will lose numbers in June as well. This quarter, there will be a loss,” he stated.

Besides Ertiga, compact SUV Brezza has an order backlog of 60,000 units. Others like Jimny and Fronx also have orders in excess of 30,000 units each.

Srivastava expressed hope that there might be some improvement in the chip supply situation in the coming months. “So probably we will have some improvement going forward from July onwards,” he stated.

Srivastava noted that the visibility on chip supplies remains limited and the company has to keep modifying its projections.

“But it looks like in the second quarter, there will be some improvement in the situation,” he said.

In April, the company produced 1,44,097 passenger vehicles, down 6 per cent from 1,52,954 in the same month last year. The shortage of electronic components had some impact on the production of vehicles, MSI had stated.

The carmaker produced a record 19.22 lakh units in 2022-23. It, however, fell short of its target of taking the overall production to 20 lakh units in the last fiscal.

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cellphones to various other electronic items.

The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as Bluetooth connectivity and driver assist, navigation and hybrid electric systems.