Mahindra suffers 10 pc production loss in Q1 on parts shortage

MUMBAI: Utility vehicle major Mahindra & Mahindra today said it incurred a production loss of up to 10 per cent in the April-June quarter due to supply constraints of components. "Mahindra's auto division saw 8-10 per cent production loss in the June quarter due to shortage of spare parts," Mahindra & Mahindra President (Automotive and Farm Equipment) Pawan Goenka told reporters here. The production of the company's tractor division also suffered by 7-8 per cent due to component supply issues, he added. "We have been facing shortage of tyres, fuel injection and castings for the last six months," Goenka said. M&M President (Finance, Legal and Financial Services) Uday Phadke said the company is working closely with suppliers, and the situation is likely to improve by the end of this year. Post-slowdown, the demand for automobiles in the country had started picking up very rapidly since last year. Although vehicle manufacturers were capable of meeting the demand, components makers found it difficult to deal with the sudden surge -- resulting in production losses. Yesterday, VE Commercial Vehicles (VECV) had said it is currently incurring a production loss of up to 20 per cent for its Eicher-branded trucks and buses due to shortage in supply of components. VECV is mostly facing a shortage of components like tyres, fuel pumps and axles. A joint venture between the Volvo Group and Eicher Motors, the company sources fuel pumps for Eicher products from global engine components manufacturer Bosch. Source : Economic Times    (7/28/2010)