Mahindra & Mahindra (M&M) said owing to a semiconductor shortage it will cut down production at its automotive plants for about seven days in September, which may reduce volumes up to 25%.
“The company’s automotive division continues to face a supply shortage of semiconductors, which has been further accentuated by the Covid lockdowns in some parts of the World,” the auto major said in a regulatory filing.
“Consequently the company will be observing about seven ‘No Production Days’ in its automotive division plants in September 2021, which is estimated to result in a reduction in production volumes of the division by 20%-25%. The revenue and profitability will be impacted in line with the fall in production volumes. The company is taking various cost optimization measures to limit the impact,” it added.
The automaker assured that there will be no material impact of the above event on the XUV7OO production ramp-up and launch plans. “The date of commencement of Bookings will be announced soon,” it said.
Further, the company’s tractor operations, exports, truck, and bus business, and 3-wheeler production will also remain unaffected.
As the situation is dynamic, the company is reviewing the supply situation and all efforts are being made to minimize the impact, M&M said.
On Wednesday, the automaker reported a 17% growth in its domestic sales at 15,973 units in August 2021, as against 13651 units in the same month last year.
Early this week, Maruti Suzuki also said due to a shortage of semiconductors, it is expecting a severe slump in total production volumes at its manufacturing plants in Haryana and Gujarat in September.
“Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both the locations could be around 40% of normal production,” MSIL said.