Press "Enter" to skip to content

Indian automaker Mahindra sees chip crunch easing, eyes options for EV business – Reuters

An employee works inside the Mahindra & Mahindra manufacturing plant in Chakan, India, September 30, 2016. REUTERS/Danish Siddiqui/File Photo
BENGALURU, Nov 9 (Reuters) – Mahindra and Mahindra Ltd (MAHM.NS) expects semiconductor shortage to persist in 2022 but with lesser severity as compared to the previous year, and is open to raise funding for its electric vehicle (EV) business, the Indian carmaker said on Tuesday.
The automaker also said with better availability of semiconductors, it hopes to maintain volume growth momentum from the third quarter onwards.
While the industry has seen a strong recovery in demand for passenger vehicles in the past two quarters, with chip shortages hurting carmakers globally, companies have scrambled to make up for the production hit.
"Q2 was the worst of the chip shortage that we have seen… the shortage cut across the company's entire portfolio," said Rajesh Jejurikar, executive director at Mahindra.
Chaired by billionaire Anand Mahindra, the company said it faced a production loss of 32,000 vehicles in the second quarter due to the shortage, yet managed to record 9% growth in sales.
Jejurikar said the company was continuously adjusting production plans as per availability of chips, and expects the crunch in 2022 will not be as acute as 2021.
In a post earnings call, Jejurikar said that by 2027, Mahindra plans to launch 13 new sport-utility vehicles and expects electric vehicles to comprise about 20% of its volumes in India.
The company is open to raising money from investors for its EV business and could consider carving it out as a separate unit, Mahindra's managing director Anish Shah said.
"It is not just for capital but also expertise… that will help us grow faster. We see EVs being a major play for us going forward," Shah added.
For the reported quarter, consolidated net profit jumped to 19.29 billion rupees($260.01 million) from 1.36 billion rupees a year ago, when it had booked a one-time charge.
The company's shares rose 5.24% to 904.50 rupees at market close.
($1 = 74.1900 Indian rupees)
Our Standards: The Thomson Reuters Trust Principles.
Subscribe to our auto newsletter to get the latest news that are driving the global automotive industry.
Subscribe to our newsletter to get all the news you need to start your day.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved