Semi conductor chips shortage: Longer wait time for M&M’s Thar and XUV300

Updated : March 02, 2021 02:59 PM IST

The auto industry in general, like many other sectors, has been hit by the ongoing shortage of semiconductor chips.

February was a tough month for M&M in terms of production as it faced a 40 percent shortage of electronic control units (ECUs). An ECU is a small device inside a vehicle that controls one or several electrical systems.

Demand for the Thar and XUV300 was strong, but production issues meant the company struggled to keep pace with the orders.

If you are looking to buy the Thar then you may have to wait for 8-10 months and 2-3 months for the XUV300.

The auto industry in general, like many other sectors, has been hit by the ongoing shortage of semi-conductor chips.

“We received 17000 lesser ECU’s in February than what we ordered. M&M is worse off than others on semi-conductor issue because our ECU supplier’s main semi-conductor supplier in Malta has been hit harder than others”, said Rajesh Jejurikar, Executive Director, Automotive and Farm Equipment Sector at M&M.

Speaking exclusively with CNBC-TV18, Jejurikar said it was not easy for an automobile company to diversify the ECU supply chain at a short notice but the company is hoping for things to improve after June. The company’s new products like the 601 are ready for launch but the actual start of production could be affected due to the ongoing supply constraints.

“We would not want disproportionately long waiting times for new products”, he said. M&M has also said that supply constraints on infotainment systems and airbag controllers are also affecting production.

The Mahindra Group sold 28146 tractors in February, a 25 percent increase over the same period last year. Jejurikar said that the company could have done better on tractor sales had it not been for supply issues with regard to power steering and four-wheel drives. “We need to take care of model-specific concerns around tractors. M&M was not ready for the shift towards power steering and four-wheel drives. We have run out of power steering capacity with our suppliers”, he said.

Mahindra and Mahindra has also appealed to the government to defer the implementation of CAFE (Corporate Average Fuel Efficiency) and BSVI Part II norms. The Society of Indian Automotive Manufacturers has requested Union Minister Nitin Gadkari to defer the implementation of new regulations which may significantly impact vehicle pricing. “We are ready to follow the new set of proposed regulations but deferment would give some stability to the industry”, said Jerjurikar.

Mahindra has seen strong demand for petrol variants with 50 percent of XUV300 and 20 percent of Thar bookings coming for gasoline options. “We can swing to any gasoline ratio as per market demand. Looking at multiple alternate fuels and a CNG variant as well”, he said.

Published : March 02, 2021 02:46 PM IST

Semi conductor chips shortage: Longer wait time for M&M’s Thar and XUV300

You May Also Like

Private hospitals can buy COVID-19 vaccines directly from May 1

COVID vaccination: Private vaccination centres to procure directly from manufacturers starting May 1

LIC collects highest ever new premiums worth Rs 1.84 lakh crore in FY21; claims at Rs 1.34 lakh crore

Trending on CNBC-TV18

recommended for you