business, mahindra, tata motors, technology

Auto companies hamstrung by the continuing semiconductor shortage are taking countermeasures such as bringing down chip usage per vehicle or offering cars with fewer chip-dependent features.

Tata Motors and Mahindra & Mahindra (M&M) have undertaken these measures in a desperate effort to improve vehicle supplies and bring down the waiting period, which, in certain cases, is at a staggering 12 months. Both companies are estimated to be sitting on over 300,00 pending orders.

Tatas optimise chip usage

Tata Motors, India’s third-largest carmaker, has dramatically cut the number of chips used per vehicle. The maker of Safari SUVs has halved the number of chips used in one specific component that powers the vehicle. While Tata Motors officials did not identify the vehicle model, they said that the company was working on optimisation of chips to tide over the supply crisis.

In a post-earnings conference call, Shailesh Chandra, President (Passenger Vehicle Business Unit), Tata Motors, said, “In one component we were able to successfully bring down the number of semiconductors that we were using to half. We have been looking to convert application-specific chips to standard chips and we have gone in for optimisation of chips, which is about reducing usage of chips and validating them in a very short period.”

Cross-leveraging JLR expertise

Tata Motors has been working alongside its British brands Jaguar and Land Rover to cross-leverage their expertise for the future generation of electric and electronic architecture. Electric vehicles need many more chips than fossil-fuel powered vehicles.

“We have taken multiple initiatives as part of our semiconductor strategy in light of demand for electric vehicles. We have successfully brought down the use of chips by going with an all-in-one strategy. Many times the components have been different and we have been able to optimise the number of semiconductors and exposure to semiconductor suppliers,” Chandra added.

Tata Motors has been less impacted by the semiconductor shortage compared to its peers Maruti Suzuki, Hyundai and M&M, who have had to resort to significant production cuts due to the chip shortage over the last few weeks.

M&M reduces chip usage

To get around the shortage, M&M has created step-down variants of the in-demand XUV700 SUV, which lack some features that customers had opted for. For instance, the chip-dependent wireless mobile charging feature has been removed by the company in the flagship SUV before being offered to the customer.

Speaking to Moneycontrol, Rajesh Jejurikar, Executive Director (Automotive and Farm Equipment Sectors), M&M, said, “There are specific shortages of semiconductors that go into high-end products. We may adapt some of our variant offerings in XUV700 to give customers the option of giving up some features on a lower-price setoff, depending on the kind of shortages.”

Jejurikar added, “We are not forcing the customer to buy the new variant. It is completely up to them to choose.” The fully loaded variant of the XUV700 comes with 170 chips, some of which power the Advanced Driver Assistance System (ADAS).

With the XUV700 getting cumulative bookings of 70,000 units, M&M claims that consumer response for the SUV has made it the company’s best product rollout to date. The Mumbai-based company has pending orders of 160,000 units, including bookings for the XUV700. M&M added that it had lost total production of 32,000 vehicles during the September quarter due to the chip shortage.

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