Maruti Suzuki Reduces e-Vitara Production by 67% Amid Rare Challenges
In a significant move reflecting the ongoing challenges in the automotive supply chain, Maruti Suzuki has announced a substantial reduction in the production of its first electric vehicle, the e-Vitara. The company will cut its initial production schedule by more than two-thirds in the first half of the fiscal year due to a shortage of rare earth magnets sourced from China. While the overall production target remains at 67,000 units by March 2026, the immediate focus will shift to managing inventory for both domestic sales and exports.
Production Adjustments Amid Supply Chain Challenges
Maruti Suzuki’s decision to scale back production comes as the company grapples with a critical shortage of rare earth magnets, essential components for various vehicle parts, including electric motors and sensors. Originally, the company planned to manufacture approximately 27,000 units of the e-Vitara between April and September of this fiscal year. However, sources indicate that the revised target is now around 8,000 units. This adjustment reflects the ongoing difficulties in securing necessary parts, which has prompted Maruti to reassess its production strategies for other models as well.
The e-Vitara, which is being produced at Maruti’s facility in Gujarat, is poised to be the company’s first battery-electric vehicle (BEV) in India. The company had initially aimed to launch the vehicle in time for the festive season later this year. However, the uncertainty surrounding the supply of magnets has raised questions about whether this timeline will be met. A spokesperson for Maruti Suzuki declined to comment on the potential impact on the vehicle’s launch schedule.
Strategic Planning for Future Production
In light of the current supply constraints, Maruti Suzuki is actively evaluating dealer inventory levels across its various models. The company is prioritizing the use of available rare earth magnet supplies for vehicles that demonstrate higher demand. This strategic recalibration is part of an ongoing effort to align production with market realities, ensuring that the company can respond effectively to consumer needs while navigating the challenges posed by the supply chain.
The e-Vitara represents a significant step for Maruti Suzuki as it seeks to compete in the growing electric vehicle market. The company plans to market the vehicle not only in India but also across multiple continents, including Asia, Europe, Latin America, and Africa. Additionally, Maruti is collaborating with Toyota, which will offer a version of the e-Vitara under a different brand, further expanding its reach in the electric vehicle segment.
Negotiations for Magnet Supply Resolutions
Maruti Suzuki is actively engaging with government officials and industry bodies, such as the Society of Indian Automobile Manufacturers, to address the ongoing magnet supply issues. The company has submitted applications to the Chinese government to secure the necessary supplies of these critical components. However, delays in the approval process have raised concerns, prompting calls for intervention from the Indian government and embassy in China to expedite the resolution.
The company has acknowledged the challenges posed by the magnet shortage, with Senior Executive Director Rahul Bharti stating that it is difficult to provide specific details until a response is received regarding their application. He emphasized that the situation is not a restriction but rather an endorsement of end use, indicating that Maruti Suzuki is committed to keeping stakeholders informed about any developments related to the supply crisis.
As Maruti Suzuki navigates these challenges, the future of the e-Vitara and its broader electric vehicle strategy will depend on the resolution of supply chain issues and the company’s ability to adapt to changing market conditions.
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