Bajaj Auto’s planned production volume of the global shortage of semiconductor chips is likely to hit 15-20 percent this quarter, according to reports.

Rakesh Sharma, executive director, Bajaj Auto says, “production of two-wheelers, particularly sports motorcycles and electric scooters sold in the domestic market, is nearly 15 percent lower due to supply constraints.”

Outages faced by semiconductor suppliers have worsened visibility of chip availability and are also slowing down capacity expansion plans for the company’s flagship electric vehicle (EV), the Chetak. Even as it aims to start manufacturing the scooter from June at a new factory, under a separate EV subsidiary called Chetak Technology Limited.

Sharma says, “we continue to face supply chain issues in quarter one. Strategically speaking, we have been working very closely with international vendors and, in some cases, we have single source dependencies. This has allowed us to develop solutions that are very effective, but there have been unfortunate outages at their end and this now reflecting in their supplies to us. We are taking countermeasures and developing alternate sources, but the testing and validation takes time. Therefore, we see in Q1 an impairment of up to 15-20 percent of what we can produce.”

Bajaj Auto reported 10 percent growth in net profit for the March quarter at Rs.1,469 crore against Rs.1,332 crore in the corresponding quarter of the previous fiscal.

“Chetak Technology will start manufacturing operations by June and we will work with whatever quantity of components we are able to procure. So, we are on track for June production with this factory in Akurdi. However, we are living week to week when it comes to chip availability, so I’m not able to say exactly how much production we will be able to do. Supply is gradually improving and we hope the trend continues,” adds Sharma.