Indian production of Mahindra and Mahindra flags hit due to chip shortage

BENGALURU, Sept. 2 (Reuters) – Indian automaker Mahindra and Mahindra (MAHM.NS) on Thursday said it expects a 20% to 25% drop in vehicle production in September in its auto division due to a shortage of semiconductors.

Automakers around the world have been hit by semiconductor shortages and warned of further pain due to stiff competition from the sprawling consumer electronics industry for chip shipments.

Mahindra will observe “no production days” of around seven days at its auto division factories this month, the company said in an exchange filing.

Earlier this week, India’s largest automaker Maruti Suzuki (MRTI.NS) said it expected production at its factories in Haryana and Gujarat states to be hit in September by due to a shortage of semiconductors. Read more

Mahindra said its revenue and profitability would be affected by the decline in production volumes.

Mahindra shares are down almost 1% after the production update.

However, the automaker said its tractor operations and exports, truck and bus business and 3-wheeler production were unaffected by the disruption.

Reporting by Chandini Monnappa in Bengaluru; Editing by Shounak Dasgupta and Subhranshu Sahu

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