Tata Motors shares slip for 2nd straight day on chip supply shortage
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Tata Motors share price slipped over 3 percent in early trade on July 7 after the company flagged chip supply shortage. Shortage of semiconductors may see Jaguar Land Rover report 50 percent lower wholesale volumes by the end of the September 2021 quarter coupled with a negative EBIT margin, Tata Motors, the owner of the two British brands, warned.
The chip shortage is presently very dynamic and difficult to forecast. Based on recent input from suppliers, we now expect chip supply shortages in the second quarter ended September 30, 2021, to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 percent lower than planned, although we are continuing to work to mitigate this," company said in a BSE filing.
The broader underlying structural capacity issues will only be resolved as supplier investment in new capacities comes online over the next 12-18 months, so we expect some level of shortages will continue through to the end of the year and beyond, the company added.
