Tata Motors looking at changes in trim mix, direct buying from stockists to deal with chip shortage

 

Tata Motors is looking at various measures, including direct buying from stockists and making changes in the product configurations, to offset the impact of semiconductor shortage on its production activities and sales, a top company official has said.

The auto major, which sells models including Nexon, Harrier and Safari in the domestic market, is also looking at different kinds of chips which could be used in components where the supply situation is severe.

The automaker expects the situation to remain challenging in the ongoing quarter and some improvement in supplies only in the second half of the fiscal.

”Yes, we are definitely impacted because of uncertainty of supplies but so far we have been able to manage somehow,” Tata Motors President Passenger Vehicles Business Unit (PVBU) Shailesh Chandra told PTI when asked if the company was facing issues in its production activities due to semiconductor shortage.

He said the company is mulling reworking some of the product variants in order to minimise the production loss.

”We are looking for alternate semiconductors and at times procuring directly from stockists. We are also trying to see if a more standard chip can be used in certain components where we are facing stress. Besides, we are looking at trim mix so that we don’t lose on the sales,” he added.

The company is working very closely with chip suppliers as well to manage the situation, Chandra stated.

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 last few months has put pressure on the global supply chains leading to a shortage.

Chandra noted that the situation in the current quarter is going to remain tough and things are expected to improve in the second half of the current fiscal.

”It is a very uncertain situation though, very hard to predict,” Chandra said.

Jaguar Land Rover, which is owned by Tata Motors, is also facing stress on production due to the chip shortage issue.

The British brand expects semiconductor supply shortages in the July-September quarter to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 per cent lower than planned.

JLR currently has about 1,10,000 global retail orders pending.

Earlier this week, Hyundai Motor India MD and CEO S S Kim had also stated that the automaker is facing issues due to the semiconductor shortages.

”Our production people are managing the situation, they are closely collaborating with our suppliers. Our production is very flexible so that we can adjust as per the situation…we have been affected but not that much,” he had noted.