Car makers have resorted to normal levels of production with the easing of the chip crisis.

The industry is now ramping up production in preparation for the festive season.

“The semi-conductor situation has been much better. Up to June, we had a production loss of 28,000 vehicles. From July, we have had normal production,” Shashank Srivastava, senior executive officer of Maruti Suzuki India Limited, said at a monthly sales briefing of the company.

Asked if the crisis was over, he said: “We are still monitoring the situation closely and we don’t have visibility too clearly. We keep revising a few weeks ahead. But supplies are much better and the crisis seems to be petering off.”

Rajesh Jejurikar, executive director of auto and farm sectors at Mahindra and Mahindra, said: “Our SUV production is up significantly. The problem of semiconductors has been sorted out, and we are producing at capacity now.”

“While we might still face surprises on the semi-conductor issue, in July we have been able to produce XUV700 and Scorpio in good numbers as the semi-conductors for the airbag control system have eased. Our waiting periods are coming down.”

Srivastava said with supply chain constraints less of a problem the company will moderate production according to demand.

“Earlier with the chip crisis, we could only produce models for which the semiconductors were available. Some of these models were not in demand whereas, for the models for which there were long booking orders, we were facing a shortage.”

“As a result, we had to resort to discounting to clear off the models in the inventory. Now with the supply situation much better, we will produce according to demand.”

One of the spin-offs of better chip supply has been a glut in stocks. Srivastava said the company last had such stocks of 30 says in 2018-19.

“The present stock levels reflect a normal production in terms of the semi-conductor crisis. I think 30 days of stock is normal and I don’t think stock levels will go beyond this.

“I expect retail to be less in this month and OEMs and dealers will stock up
in anticipation of the festive season.”