Chip shortage hits Mahindra and Mahindra production

Chip shortage hits Mahindra and Mahindra production

CHENNAI: Homegrown automotive major Mahindra and Mahindra (M&M) is weighing scaling down of production due to the ongoing global semiconductor chip shortage, said a top executive of the company.
“We are evaluating it, but have not reached a conclusion about it yet. We are looking at what we have in our inventory and the balancing act that needs to be done,” said M&M executive director Rajesh Jejurikar. M&M’s comment comes after Maruti Suzuki announced plans of cutting down production due to the chip crisis.
Already the chip shortage has begun to impact M&M’s product delivery plans. “We will make delivery announcements about the XUV700 when we have more confidence regarding the semiconductor situation,” Jejurikar said. “Right now The situation is very dynamic.” What has hit companies like M&M is the resurgence of the pandemic in Asian countries like Malaysia which are semiconductor sourcing hubs. “Malaysia is going through a serious wave of the pandemic and since a lot of semiconductors come from the Asian side, it is affecting supplies,” said M&M CEO Anish Shah.
Meanwhile, M&M reported a profit of Rs 424 crore in the first quarter of fiscal 2021 on the back of improved demand for its models. On a comparative basis, it made a loss of Rs 49 crore a year earlier. Revenue zoomed 60% to Rs 19,172 crore. Though demand improved compared to last year when Covid induced a countrywide lockdown, M&M remains under pressure as “commodity inflation and semiconductor supply issues continue to be of concern”.

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