Looking for alternatives to deal with semiconductor shortage, says Tata Motors

Tata Motors said on Monday it was not fully protected against the shortage of semiconductors, but was looking for alternative solutions wherever possible to keep its production lines going.

Speaking to reporters on the sidelines of the launch of the flagship SUV Safari, Guenter Butschek, CEO and managing director, Tata Motors, said that while the semiconductor supply was a challenge, it had not reached levels where Tata Motors needed to panic. “We are cautiously optimistic, however we are not fully protected at this point in time. But there is no reason to get into panic because situation still seems to be under control,” Butschek said.

He said the company was also working on finding alternative solutions to use parts instead of semiconductor in its existing product line. He also said that the company was fully prepared and could also shift the production sequence to models that could be produced without these particular components, so that it does not lose production capacity. While this may affect demand, the company is working on solutions to keep the impact to bare minimum, Butschek said.

A shortage of semiconductors has hit the automobile sector across the globe as the demand from user industries has outstripped supply and it will take some time for the new capacities to be created. According to reports, the shortage is impacting production and imports in the automobile sector in India. Experts say the shortage is not going to be fulfilled anytime soon, and supply will take a while to recover.

“It is an extremely volatile and therefore unpredictable situation, not just for Tata Motors but for the industry. The question whether we are fighting this unpredictability for another three months or six months and what could it effectively do to our efforts to ramp up our own capacity in order to meet customers demand in the coming fiscal year — well we are keeping fingers crossed and hoping the situation will sort out soon,” Butschek said.

Meanwhile, Tata Motors, on Monday, launched its premium flagship SUV, the all-new Safari. The Safari will have a starting price of Rs 14.69 lakh (ex-showroom Delhi) for the 6/7 seater.

Commenting on the launch, Shailesh Chandra, president (passenger vehicles business unit), Tata Motors, said, “Safari had introduced India to the SUV lifestyle and in its contemporary avatar, the new Safari is in-sync with the multifaceted lifestyles of today’s SUV customer.”