Chip Shortage And Production Cost Crisis At Maruti Suzuki

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Chip Shortage And Production Cost Crisis At Maruti Suzuki
28 Oct 2021
6 min read


News Synopsis

The country’s leading carmaker Maruti Suzuki has recorded a net profit of 65.3% on a quarterly basis (Q2) and yet they are facing serious trouble in production due to global chip shortage. Shockingly, the carmakers have to cut down the production this year due to a disrupted supply of chips and never-ending demand from customers across the country, especially for electric vehicles. The chip shortage is a worrying factor since the chip is responsible for powering everything from fuel ignition to entertainment options, technically, a car cannot function without the chip. This disrupted supply of chips has resulted in 60% less production by Maruti Suzuki and also said that its passenger car supplies fell to 67.4 in the last month. 

Amidst all the struggles that the company has faced, they have increased car prices for the fourth time in a row, hiking car prices remain the only option when the company is suffering from increased costs of metals and base articles. Maruti Suzuki remains the carmaker in the country which sells every second car and has a huge market despite all odds. 

TWN In-Focus