Suzuki Motor Gujarat to scale down production this month due to chip shortage

Suzuki Motor Gujarat (SMG), a 100 per cent subsidiary of Japan's Suzuki Motor Corporation, will scale down production activity this month at its Ahmedabad-based manufacturing plant due to semiconductor shortage, Maruti Suzuki India (MSI) said on Wednesday.

SMG, which supplies cars exclusively to MSI, has also decided to scale down production to single shift at some manufacturing lines in the plant.

"Owing to the semiconductor shortage situation, the company has been informed by its contract manufacturing company, SMG, that production will be partially impacted in this month," MSI said in a regulatory filing.

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SMG will tentatively not carry out production on the three Saturdays (August 7, 14 and 21) this month, it added.

In addition, some of the production lines at SMG plant may see temporary reduction from two-shift to one-shift working, MSI noted.

As the situation is dynamic and uncertain, the company will monitor and take a day-to-day decision on models, lines or shifts to optimise resources for maximum efficiency, it added.

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cellphones to various other electronic items.

The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.

Industry experts feel that enhanced demand for automobiles in the past few months has put pressure on the global supply chains leading to a shortage.

SMG has an installed production capacity of 7.5 lakh units per annum. Together with MSI's production ability of 15 lakh units, Suzuki's production ability of automobiles in India is around 22.5 lakh units.

All units produced in SMG are supplied to MSI.

Suzuki had established SMG in March 2014, aiming to secure production ability in preparation for the automobile market growth in India, as well as for expansion of exports from the country.

In October 2020, SMG became the fastest production site of Suzuki to achieve accumulated automobile production of 10 lakh units.