The MG Hector became the spearhead of technology advancement and in-car connectivity solution in 2018 when it arrived in India. With modern tech and creature comforts in bucket loads, it almost disrupted the compact SUV space and the market saw all rival manufacturers following suit, with features and tech-loaded offerings. That said, the company became the victim of its own strategy when demand for cars took off post the COVID lockdown period. The industry crippled due to the semiconductor chip shortage, one of the key components in technologically advanced new-age cars, and MG Motor India which only has tech-laden compact SUVs on offer saw itself struggling to meet the orders.
Also Read: MG Motor India To Launch A New Urban EV In Q2 2023
The semiconductor crisis obviously took a toll on the company's sales with its monthly production averaging at around 4000 - 4500 units. But MG Motor has now managed to localise few components and arrange some alternative supplies. The company now plans to ramp up production to 5000 - 6000 units per month, as it is gears up to introduce the Hector facelift and a mass market EV in India soon. Besides reducing the waiting period of existing models, the production ramp up should also help MG Motor India to meet the demand for its upcoming models.
Speaking with Siddharth Vinayak Patankar, Editor-In-Chief, carandbike, Rajeev Chaba, President and Managing Director, MG Motor India said, "All our four products are in the waitlist and are in demand, so demand side is not an issue. There have been some alternative supplies, we're able to localise a few things. Other supply chain issues like the freight rate have mellowed down, good news is that it is coming down drastically. So these things are helping us. We've not secured 100 per cent capacity, but looks like we're getting some good tailwinds now. On our small base of 4000 - 4500 units per month, I think we're looking forward to 5000 - 6000 units per month."
The semiconductor crisis primarily happened because majority of carmakers cancelled orders for semiconductor chips during the COVID crisis, anticipating a drop demand. At the same time, demand for gadgets, smartphones and appliances shot up as COVID compelled digitisation across sectors and services. Hence, semiconductors were exhausted in production of gadgets and smartphones, leaving the auto industry in dearth of chips. The situation turned out to be even worse for Indian automakers due to lack of a local semiconductor manufacturers and the chip stock arriving late to our market. That said, Foxconn and Vedanta merging to set up base in India for making semiconductors is a silver lining for our automakers as they can now hope to source chips locally and hopefully at comparatively affordable prices. In-turn, this should help carmakers like MG Motor India and others in ramping-up production and reducing waiting periods.
