Bengaluru: Maruti Suzuki posted a decline of 48% greater than the estimated third quarter earnings on Tuesday, as a shortage of global chips slowed production and cost of high raw materials squeezing margins.
Car makers, which are covered in plants or operated on reducing capacity during peak pandemic, have found themselves competing the consumer electronics industry for chips which are important components in electronic devices.
“Production is limited by global deficiency in the provision of electronic components because which is estimated at 90,000 units cannot be produced,” Maruti, the majority of Japan Suzuki Motor Corp, said in a statement.
Demand, however, is strong, and car manufacturers say it is more than 240,000 orders of customers delayed at the end of the third quarter.
Prices of raw materials and shipping costs also surge due to supply chain disorders, squeezing profit margins in companies that want to recover from the impact of the pandemic.
Car makers have tried to convey some of these costs to customers to reduce punches.
Maruti raised the price of the year at least four times last.
Maruti, who sells every second car in India, said sales units fell to 430,668 vehicles from 495,897 cars in the previous year.
Profit came at 10.11 billion rupees ($ 135,430,000) for three months ending December 31, compared to 19.41 billion rupees in the previous year.
Total revenue from operations fell 1% to 232,460,000,000 rupees.
($ 1 = 74.6525 Indian Rupee)