Maruti Suzuki to raise production in October

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Maruti Suzuki NSE 0.28% has told its component suppliers to prepare for the production of 160,000-180,000 cars and SUVs in October, according to a report in The Economic Times. The country’s largest passenger vehicle manufacturer is making arrangements to secure the supply of chipsets through multiple channels.

The October output will be 60-80% higher than September and only about 5% lower than a year ago if it meets the goal. Due to a global shortage of semiconductors, a vital component in new-generation automobiles, the manufacturer that sells one out of every two passenger vehicles in India has been forced to curtail output this month to about 100,000 units.

With the Covid-19 situation in Malaysia easing, Maruti’s ability to supply chips may have improved. The chip production facilities in the Southeast Asian country are currently operating in three shifts seven days a week.

However, some industry experts believe there is no guarantee that the maker of the Swift and Vitara Brezza will accomplish the target. This was likely implemented to keep the seller community prepared in the event that the chipset supply improves. According to them, the prediction has a 15-20% downward tilt.

If the chip supply improves, but the element and raw materials situation on the vendor stage remains tight, the company will suffer a significant output loss just before the festival season.

Vendors may also be urged to prepare for an output of over half a million in the October-December quarter. This points to a 7.5% increase in production in the crucial holiday quarter compared to a year ag0.