Maruti Suzuki Alto cars to be exported are parked in a holding area at Adani Ports and Special Economic Zone in Mundra, 400km from Ahmedabad. Photo: AFP / Sam Panthaky

India’s leading carmaker Maruti Suzuki reported a 5% increase in sales in August, despite a chip shortage plaguing the global auto industry.

It sold 130,699 units in August, against 124,624 units in the same month last year. “Sales volume of the company in August 2021 was affected due to electronic components shortage. The company took all possible measures to limit the adverse impact,” it said.

In August, Maruti Suzuki cut its production 22% to 133,520 units, as against 170,719 units in July, due to the shortage of semiconductors.

Sales of mini cars in August were 20,461 units, compared with 19,709 units in the corresponding month last year, while compact car sales dipped to 45,577 units, against 61,956 units in August 2020.

Utility vehicles logged higher sales at 24,337 units against 21,030 units in the same month last year. Exports rose nearly three times to 20,619 units in August, against 7,920 units in the year-ago month.

Production cut

With no let-up in the semiconductor shortage, the company had in a regulatory filing on Tuesday said it will have to bring down its vehicle production by 60% in September. In August it slashed production only at its Gujarat plant, but now it will have to do the same in its Gurugram and Manesar plants.

Its prominent supplier Bosch has been unable to meet Maruti Suzuki’s semiconductor orders as its plant in Malaysia was shut down due to the pandemic.

This slashing of production could affect Maruti Suzuki’s sales during the festive season when demand normally reaches its yearly peak. It may also lead to a longer waiting period for cars.

Indian carmakers across the board are facing a chip shortage and industry body the Society of Indian Automobile Manufacturers has urged the government to work toward ensuring that once these semiconductor plants reopen, Indian automakers’ orders are cleared at the earliest.

Price hike

Maruti Suzuki also announced it will increase the prices of its vehicles in September as input costs continue to be high. This will be the third hike this year – in January it increased prices by 1.4% and in April by 1.6%, and it is yet to announce the quantum of the hike for September.

The carmaker said input cost pressure has been building over the last 15 months and it had not increased prices proportionately, hoping costs would soften.

In 2021, almost all automobile manufacturers raised their prices in line with the sharp increase in commodity prices — metals and precious metals — that form key inputs in production.