September 19, 2021

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MG Motor to shut Halol factory for a week on rising Covid cases and parts shortage

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There was already a shortage of critical parts like chipsets, and now the disruption in production in Maharashtra, as well as the national capital region (NCR), has exacerbated the supply chain issue further. MG Motor India’s planned vehicle output for April is likely to be hit by a minimum of 20-30%, which may get aggravated in May.

MG Motor, the maker of Hector SUV, has decided to shut its Gujarat plant for a week to help break the chain of Covid-19 infections, mirroring a similar move by Hero MotoCorp as the second wave of the disease sweeps across the country.

In its missive to auto parts makers on Monday, the company said it will be shutting its Halol plant from April 29 to May 5, people in the know told ET.

Rajeev Chaba, president of MG Motor India, confirmed the development.

The decision follows the government’s appeal to break the chain of infections and to consolidate raw material in the wake of shortage of medical oxygen and manpower absenteeism.

The company has, however, requested its suppliers to build their inventory to support production when it resumes.

There was already a shortage of critical parts like chipsets, and now the disruption in production in Maharashtra, as well as the national capital region (NCR), has exacerbated the supply chain issue further. MG Motor India’s planned vehicle output for April is likely to be hit by a minimum of 20-30%, which may get aggravated in May.

Toyota Kirloskar, too, has shut its factory for several weeks. While the company has said it is for maintenance, the rising number of Covid-19 cases and the impact of supply chain problems have played a part in triggering the shutdown at Toyota’s factory in April and May, said people in the know.

MG Motor India sold over 28,000 cars in 2020 with a market share of 1.2%. The company had plans of selling over 50,000 cars in 2021.

The target may be hard to achieve, given that production was impacted in April due to unavailability of parts and a sustained shortage might have compelled the company to resort to a plant shut down.

MG Motor, which has already invested Rs 3,000 crore in India, has lined up an additional Rs 1,500 crore investment to enter the country’s fast-growing, mid-size SUV segment and launch a product possibly ahead of the festive season.

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The company said each plant and Global Parts Center will remain shut for four days, in a staggered manner between April 22 and May 1 based on the local scenario.

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