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ShareM&M produces 400-500 vehicles less in Feb
MUMBAI: The power situation in the state has begun to hurt the industry. According to Pawan Goenka, president, automotive, Mahindra & Mahindra, the company lost production of about 400-500 vehicles during February due to power cuts. "Although the power cuts didn't affect us directly, several of our suppliers were hit. Since we work on minimal inventories, any delay of supplies impacts our production," Goenka said.
M&M sold 13,746 vehicles in February, suffering a production loss of about 4% during the month.
With peak hour shortfall exceeding 5,000 MW, the state is imposing load shedding ranging from 4 hours to 12 hours in various parts of the state, excluding Mumbai. In the days to come, productivity loss would become visible as the state has asked companies to cut consumption by a fifth and added another day of blackout for the industry.
Even though major companies have their own captive power plants or have firm supply agreements with state electricity boards, their vendors, many of whom are small and medium enterprise, are at the mercy of grid supply. With the sector growing at full steam, most vendors are operating at 100% capacity, and hence each hour of production loss unsettles the complete supply chain.
Bajaj Auto, another Maharashtra-based automobile company, reported a 2% drop in February sales over the same period last year.
Analysts believe power shortage and inventory built up at the dealer level are the chief reasons for the slowdown of sales.
Company officials weren't available for comment. However, its communiqué to the stock exchange cited production constraints as the reason for the slowdown.
Not many are willing to buy this, though. "The company has manufactured much more than this in the past. So, its production constraint could be more from the suppliers' front. And then, there was also an inventory built up in the system, part of which got corrected this month," said an analyst.
