Mahindra forecasts decline in production in FY 2020-21

-Mahindra faces a supply shortage of semiconductors used in ECUs

-Company’s tractor and three-wheeler production likely to continue uninterrupted

Mahindra and Mahindra in a recent regulatory filing stated that the company is facing a supply shortage of micro-processors used in Electronic Control Units (ECUs) of its vehicles. This might result in the reduction of production and sales volume in the last quarter of FY 2020-21. 

The said component is supplied by Bosch Limited and Mahindra has said that it is working closely with the automotive part manufacturer to assess the supply disruption and control the impact of the same. The Indian automaker states that there will be no obstruction in the company’s tractor and three-wheeler production due to the shortage of the part. Even the passenger vehicles production will be unaffected for the month of December 2020.

The regulatory filing by Mahindra and Mahindra read, “This is to inform you that the operations of the Company in the Automotive Sector will be affected by the global supply shortage of micro-processors (semiconductors) used in Electronic Control Unit (ECUs) which is supplied by Bosch Limited. The Company is engaging closely with Bosch Limited and assessing likely production loss for the last quarter of FY 2020-2021 on account of this supply disruption as also steps to be taken to minimize the impact of the same.”

In a piece of recent news, the waiting period of the newly launched Mahindra Thar has gone up by seven to eight months. Although the company plans to ramp up the production from January 2021, the shortage of parts could further delay the production of the models leading to an extended waiting period for the SUV enthusiasts. On the flip side, Mahindra has delivered over 2,500 units of the Thar in the previous month and imposed a price hike starting from 1 December. The details of which can be read here.