Business Standard

Worst of semiconductor shortage over: Tata Motors Group CFO

Tata Motors also sees the contribution of its electric vehicles to its overall passenger vehicles sales reaching double digits soon, from about 6 per cent at present

P B Balaji (Photo: Twitter)

P B Balaji (Photo: Twitter)

Press Trust of India New Delhi
The worst of the ongoing semiconductor shortage crisis that has hurt Jaguar Land Rover and Tata Motors is over and normalcy is expected in the coming quarters as additional chip capacity becomes available and more long-term planning with suppliers takes place, Tata Motors Group CFO PB Balaji said on Monday.
Tata Motors also sees the contribution of its electric vehicles to its overall passenger vehicles sales reaching double digits soon, from about 6 per cent at present.
Reflecting on the semiconductor crisis and its impact on Jaguar Land Rover (JLR), he said in the fourth quarter of the previous fiscal, Tata Motors' British arm had produced about 1.25 lakh units.
In the first quarter of this fiscal, it went down to 76,000 units and in Q2 it slipped to 51,000 units, while recovering in Q3 at 72,000 units. Fourth quarter and beyond, this number will keep increasing again, Balaji said while addressing reporters in an earnings call.
"We are now getting back on the rails as far as the numbers are concerned but it is gradual and haven't bounced back to the extent that we would have loved to happen," he added.
The company does not expect everything to be resolved in Q4 but definitely improvements will be there.
"As (semiconductor) capacities come on stream, as planning with chip suppliers and semiconductor suppliers become more and more long-term and more transparent, we expect things to keep improving...," Balaji said.
Without giving a definite timeline, he said, "So overall, we do expect to see getting back to normalcy in the coming quarters. But how far away?...Let's watch it quarter by quarter. Upward sloping curve is definitely on."

Asked if it was fair to say the worst is over, he said, "Yes."

Balaji also said the recent floods in Malaysia, one of the chip manufacturing hubs, have "impacted a little bit but they started coming back again".
"Normally there is a lead time for getting impacted but we do see Q4 being better than Q3. So that's the reason we are not calling out full-fledged problem solved, but gradual improvement is definitely in sight," he said.
Commenting on Tata Motors' growth in electric vehicles, Balaji said, "EV sales hit a new peak of 5,500 units in Q3 and the EV penetration or portfolio is now nearing 6 per cent."

Asked if Tata Motors sees the EV share crossing double digits in Q4 or Q1 of next fiscal, he said, "Time will tell because it's a combination of our ability to supply, to begin with. That's where the concern is. Otherwise, if we had all options available, it should be much sooner than that."

Balaji further said, "If I look at the order book, (it) is much higher than the ability to sell at this point and because supplies are constrained."

Therefore, he added, "I do expect with every passing month this penetration will keep increasing and sooner rather than later it will cross double digits because the consumer adoption is very high.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Jan 31 2022 | 8:43 PM IST

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