Tata Motors will be forced to cutdown output in the coming months due to a shortage in the availability of semiconductors. The Mumbai-based company is one of the last major carmakers out of the top five to announce cutback in production due to the chip shortage.
Semiconductor shortage continues to impact the auto industry globally. The recent lockdowns in East Asia have worsened the supply situation and, hence Tata Motors is forced to moderate production and offtake volumes in the coming months, Tata Motors said in a statement.
The Mumbai-based maker of Nexon and Harrier did not specify the quantum or the dates of the output cut. Tata Motors produces cars and SUVs at Sanand, Gujarat and in Pune, Maharashtra.
On August 31, car market leader Maruti Suzuki said that September volumes could be 40 percent of its normal monthly output due to the non-availability of semiconductors. Maruti will keep its Haryana plants shut while Suzuki Motor Gujarat will shut its Gujarat plant due to this. This will hit Maruti’s market share starting with the wholesale level followed by retail.
“The situation is fluid and we will continue to work to mitigate the impact of this and aim to meet our customer orders through an agile, multi-pronged approach including close engagement with our extended supply chain partners, procuring chipsets from the open market, using alternate chips and managing our model and trim mix,” Tata Motors added.
The auto industry has been battling semiconductor shortages for nearly a year. The issue came to the surface when utility vehicle specialist Mahindra & Mahindra announced production cuts last year due to the chip shortage. Since then several manufacturers including Ford, MG Motor, Renault, Nissan and Bajaj Auto have had to cutback production due to the same reason.
Maruti Suzuki’s and Tata Motors’ decision to lower production comes just as its dealers prepare to place orders to build inventory with the start of the festive season.
(Source: Money Control)
