M&M expects drop in production, sales at auto division over supply shortage

M&M is expecting a dip in production and sales volume at its automotive division and in its subsidiary in the last quarter of the current fiscal due to global supply shortage of micro-processors

Mahindra and Mahindra (M&M) is expecting reduction in production and sales volume at its automotive division and in its wholly-owned subsidiary in the last quarter of the current fiscal due to global supply shortage of micro-processors.

M&M said it is engaging closely with its auto components supplier Bosch and assessing likely production loss.

"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," Mahindra said in a regulatory filing.

Mahindra said this is estimated to result in reduction in production/ sales volume of the company (automotive division) and Mahindra Vehicle Manufacturers (MVML), a wholly-owned subsidiary of the company, in the last quarter of financial year 2020-2021.

"The company is engaging closely with Bosch 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 minimise the impact of the same," M&M said.

However, estimation of exact likely reduction in production/sales volume of the company (automotive division) and MVML for the last quarter is not ascertainable at this stage, the company added.

M&M, however, said there will be no material impact of the above event on production/sales volume of the company (automotive division) and MVML in the month of December 2020.

The company said its tractor operations and three-wheeler production is unaffected with the above disruption.