Here's Why Mahindra Halted Production for a Week This Month

Mahindra, one of the country's largest carmakers, suspended vehicle manufacturing for a week this month, which resulted in a drop in production by 20-25% and also had an additional influence on the company's sales and profitability. Maruti Suzuki, the automobile market leader, recently also notified a probable 40% drop in manufacturing owing to a chip shortage.

Mahindra stated that it is examining the supply issue and attempting to reduce the impact. However, Mahindra has confirmed that the XUV700's manufacturing and launch plans would not be jeopardised and that an announcement about the start of the SUV's reservations will be made shortly. Maruti is also experiencing the same issue, which has caused the arrival of the new-generation Celerio to be delayed.

According to recent media reports, the global increase in COVID-19 cases, as well as patchy lockdowns in various areas of the world, is creating a serious challenge to the supply of chips and semiconductors. The problem is made more difficult by the fact that it occurs at a time when (semiconductor) chip stocks are already depleted in most locations across the world. According to various estimates, the global car industry will build 6.3-7.1 million fewer vehicles this year as a result of the prolonged semiconductor shortage.

It is also being said that most major Indian automakers, including Tata Motors, Hyundai Motor India, Kia Motors, Nissan, Renault, and Honda Cars, have either already reduced output or will do so in the coming weeks. Because of the ongoing and prolonged chip scarcity, I.H.S Markit, a sales forecast and market research organisation, has reduced its light-vehicle sales projection for India by 150,000 units, from 3.65 million units to 3.35 million units. It anticipates the chip shortage to last until 2022.