Maruti Suzuki India warns of production hit for second month due to chip shortage

BENGALURU (Reuters) -India's top carmaker Maruti Suzuki said on Thursday it was expecting total vehicle production in October at two of its plants to be around 60% of normal levels due to a global chip shortage.

Booming demand for consumer electronics and supply chain disruptions across the globe have led to an acute shortage of chips, forcing a number of car companies to drastically cut production as they try to secure limited semiconductor supplies.

Maruti and rival Mahindra and Mahindra had also warned of a hit to their production for September due to the shortage.

Maruti's Haryana plant and its contract manufacturing company, Suzuki Motor Gujarat Private, will see production curbs in October, the company said in a regulatory filing on Thursday.

In August, it had said total production volume across both locations could be around 40% of normal output in September.

Due to the problems in the industry, automakers are focussing on making high margin models and have passed on some of the costs to customers. All top carmakers in India, including Maruti, Tata Motors and Mahindra, have increased prices multiple times in 2021.

Globally, Ford Motor Co, Honda Motor Co Ltd, General Motors Co and Volkswagen AG have been caught off guard by the chip shortage, forcing many to idle or curtail production.

(Reporting by Chandini Monnappa in Bengaluru; editing by Uttaresh.V and Anil D'Silva)