The shutdown is also likely to hurt production of electric vehicles in India
Most of these manufacturers are now looking at alternate sources to replace Chinese suppliers
NEW DELHI: The current lockdown in China due to the outbreak of the novel coronavirus or COVID-19 may hit production of Bharat Stage VI-compliant vehicles critically in the coming months. The shutdown is also likely to hurt production of electric vehicles in India, said Rajan Wadhera, president, Society of Indian Automobile Manufacturers (SIAM) on Wednesday.
This is the first time the lobby group for automakers has acknowledged the disruption in production caused by the shutdown in China. This also points to the direct or indirect reliance on China when it comes to sourcing of parts by vehicle makers and their suppliers. Automobile companies like Tata Motors, Hero MotoCorp, TVS Motor Company, Mahindra and Mahindra have witnessed disruptions in supply chain management due to the outbreak of the virus in China which has spread to other countries in West Asia and Europe.
Automakers in India will have to transition to BS-VI emission compliant vehicles from 1 April, 2020. Manufacturing of diesel vehicles — passenger and commercial vehicles — and two-wheelers are likely to be hit in the coming months due to lack of supply of integral components for BS 6 compliant engines such as catalytic converters and fuel injection pumps.
According to Wadhera, many automakers in India import about 10% of their raw materials from China and disruption in availability of these parts are likely to critically hamper production across all segments and gravely affect electric vehicles. “With anticipation of the Chinese New Year, the Indian automobile industry had maintained inventory in the beginning of the year, but with the current lockdown in China, supply for BS 6 vehicles is likely to get impacted,” added Wadhera.
Most of these manufacturers are now looking at alternate sources to replace Chinese suppliers but that might take a few months due to the regulatory approvals needed. “Manufacturers are exploring alternatives to fulfil their supply chain demands but that would also take a substantial amount of time to reach stable production scale as these components would need regulatory testing,” added Wadhera.
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