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Thursday, 2 December 2021

Maruti Suzuki says semiconductor shortages easing off, but it still holds 2.5 lakh pending orders

Maruti Suzuki on Thursday said that the semiconductor shortage situation was improving and that the production has gone up over the last few months. The November production is seen at 82-83 percent against the 40 percent in September and 60 percent in October, said Shashank Srivastava, ED - Marketing and Sales, Maruti Suzuki, in an interview with CNBC-TV18.

Srivastava said, "In September, if you recall, we produce just 40 percent of our planned production, in October it is about 60 percent in November about 80 to 83 percent and in December, we are expecting about 80 to 85 percent. So, it seems to be getting better."

Srivastava said the enquiry levels and bookings are very strong now with pending bookings at 250,000.

On the demand problem, he said, “The demand problem obviously is reflected in the pending bookings that we have. So, we have about 250,000 pending bookings."

The automaker's total sales for November fell over nine percent year-on-year to 1.39 lakh units as compared to CNBC-TV18's poll estimate of 1.44 lakh units.

Maruti Suzuki has passed on three price hikes for its passenger vehicles this year. Image: Maruti Suzuki

The inventory at dealerships is at one week currently against the average of four weeks, said Srivastava.

On inventory, he said, “Whatever was produced has been dispatched and in fact, the inventory at the dealerships today is just about a week, whereas normally it is about four weeks of inventory that the dealerships carry and the inventory in the factory is almost nil.”

Srivastava added that the company has not passed on the entire cost increase to consumers despite three price hikes this year.

He said, "As far as auto industry is concerned there is a lag in the commodity prices and what we get it's about a quarter’s lag in the in the cost of procurement. The cost pressures are huge, and we haven't passed on the entire cost increases to the consumers yet, although we have had three price increases – in January of about 1.4 percent, in April of about 1.6 percent in September about 1.9 percent. But that hasn't been enough.”

Also read: Maruti Suzuki decides against reintroducing diesel-powered vehicles

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