Mahindra XUV700 Loses Features To Tackle Semiconductor Chip Shortage

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To cope with the chip shortage, Mahindra & Mahindra is offering buyers the option to get fewer features on XUV700 than originally booked

Mahindra XUV700 was launched in India in September this year. The SUV has generated a lot of buzz in our market, and the manufacturer has already received over 70,000 bookings for it to date! Although the demand for the XUV700 is strong, the production is restricted due to the global semiconductor chip shortage.

Mahindra & Mahindra has a unique workaround for this problem. The manufacturer is offering step-down variants of the XUV700, with fewer chip-dependent features on offer than the ones buyers’ had booked. The customers have the choice of buying these at a lower price than the original model(s) they had opted for.

The switch to these step-down variants is optional, as stated by M&M. Although not ideal, this seems to be a good approach to handle the semiconductor chip shortage while ensuring that the maximum number of vehicles can be delivered to customers. For reference, the top-spec variant of the XUV700 utilises 170 chips, most of which are for the Advanced Driver Assistance Systems (ADAS).

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Also, due to the semiconductor chip shortage, the manufacturer had to lower its production capacity by 32,000 units in the third quarter of calendar year 2021, which is quite a significant number, resulting in orders piling up. M&M currently has over 1,60,000 pending orders, including XUV700 and other models.

Other automakers are also coming up with unique solutions to fight the semiconductor crisis. Tata Motors, the third-largest carmaker in India by sales volume, is not as heavily affected by the semiconductor crisis as its peers. The company has switched over from application-specific chips to general-purpose chips, which has reduced the number of chips per vehicle by a considerable margin.

Thanks to that, Tata managed to pull through the last few weeks unscathed, unlike Maruti Suzuki and Hyundai, who had to shut production down temporarily. Also, Tata is working with its British marques Jaguar and Land Rover to reduce chip dependence for the future generation of EVs. Electric cars use far more semiconductor chips than cars with IC engines, which makes them way more vulnerable to the ongoing shortage.