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Maruti Suzuki warns of semiconductor issue weighing on output; shares drop 3%

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Shares of Maruti Suzuki India dropped more than three percent in trade on Friday after the automaker warned of the semiconductor shortage having an impact on vehicle production. So far in 2021, the stock has fallen more than seven percent whereas the benchmark Nifty50 has surged 25 percent during the same period.

Maruti Suzuki warns of semiconductor issue weighing on output; shares drop 3%
Shares of Maruti Suzuki India dropped more than three percent in trade on Friday after the automaker warned of the semiconductor shortage having an impact on vehicle production.
“Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the Company is expecting an adverse impact on vehicle production in the month of October’21 in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat Private Limited (SMG) in Gujarat,” Maruti Suzuki said in an exchange filing.
“Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 60% of normal production,” the auto major added.
Automobile sales data for September has started pouring in from today.
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Sales numbers were expected to be a mixed bag in September, because of the chip shortage issue and a high base, the numbers are not going to look good and not just passenger vehicles, but even premium motorcycles were hit quite a bit; dispatches were also hit because of the semiconductor shortage.
The only space that will do well is commercial vehicles because there has been a pickup in freight rates, there has also been a pickup in industrial activity as the economy has opened up. So, commercial vehicle numbers will look quite good.
Maruti Suzuki had even shut down production for a few days in September, 44 percent slide is expected.
At 10:04 am, shares of Maruti Suzuki were trading three percent lower at Rs 7,114 on the BSE. The stock touched an intraday low at Rs 7,102.
So far in 2021, the stock has fallen more than seven percent whereas the benchmark Nifty50 has surged 25 percent during the same period.
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