BUSINESS

Supply chain problems hamper auto production

Sector exploring alternatives to China

Automobile production across all categories, including that of passenger vehicles and two-wheelers, is likely to be ‘critically’ hampered due to supply chain disruption as a result of the COVID-19 outbreak, particularly in China, according to the Society of Indian Automobile Manufacturers (SIAM).

Stating that many automakers in India import about 10% of their raw materials from China, Rajan Wadhera, president at SIAM, said that the disruption in availability of these parts is likely to critically hamper production across all segments including passenger vehicles, commercial vehicles, three-wheelers and two-wheelers. The disruption will ‘gravely’ affect electric vehicle production, Mr. Wadhera added.

The auto industry, he added, had maintained inventory at the beginning of the year in anticipation of the Chinese New Year.

However, with the current lock-down in China, supplies for BS-VI vehicles are likely to be impacted. “Manufacturers are exploring alternatives to fulfil their supply chain demands, but that would also take a substantial [period] of time to reach stable production scale as these components would need regulatory testing,” Mr. Wadhera added.

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