Chip shortages impacted 20-40% of volumes of Renault Kiger and Nissan Magnite

Both these models are witnessing strong demand in the marketplace, but a parts shortage has hurt them.

With supplies drying out, Renault Nissan Alliance is compelled to shut its manufacturing line
on Tuesday the 10th of August for the entire day. And there may be a few more days – when the plant may be forced to be shut during August to ensure adequate bundling of chips meant to be consumed for cars.

The decision had to be taken at short notice given the dynamic nature of sourcing chips, which is in extremely short supply, said people in the know.

The company is likely to resume normal production
from 11th August but warned of shortage persisting – resulting in aligning production to supply chain challenges.

Rakesh Srivastava, MD of Nissan Motor India, told ET the production is being rationalised to manage supply chain challenges and yet deliver higher output. The demand is overwhelming, and because of the shortage of parts, Nissan is on flexible manufacturing operations to create optimum output.

“The semiconductor shortage has created production challenges, and the plant is operating at a high level of flexibility on production days. We are operating three shifts to deliver optimum performance even in these challenging times. The bookings balance is strong, and we could retail a lot more, maybe 20-40% if not for shortages,” Srivastava said.

To be sure, the alliance partners – Renault and Nissan are sitting on a pending booking of over 50000 units between them for their mini SUV – Kiger and Magnite combined. And over the last few months, the production has been juggling chip availability by diverting it to fast-selling models.

Considering the shortage of semiconductor-related parts, RNAIPL had, at short notice, decide to suspend the production
on 10th August 2021 for the entire plant, including Line 1 and Line 2 plus powertrain – stated a missive from the company to vendors earlier in the week.

“As the situation is very dynamic, we will again inform the vendors of any changes… ” cautioned the company.

Venkatram Mamillapalle, MD of Renault India, in a recent interview, told ET, the company could have sold 20-25% more Kiger if not for the shortage.

“The demand is not a problem, the market has bounced back very well, and we see traction across brands. For some of the variants, the shortage is to the tune of 40% in the case of Kiger. The situation is very dynamic, and it will take a while for the situation to normalise. We are dealing with it week by week,” added Mamillapalle.