The disruption in the availability of automobile parts from China is likely to critically hamper manufacturing of automobiles in India, industry body SIAM said today, potentially disrupting the smooth rollout of BS-VI vehicles and near-term electric vehicle production.
Automakers in India import about 10 percent of its raw materials from China. Within that, the industry imports 22 percent of drive transmission and steering components, 20 percent of electronics, 15 percent of non-electronic interiors, 13 percent of suspension and breaking and 11 percent of engine components come.
Rajan Wadhera, President, Society of Indian Automobile Manufacturers (SIAM), said that automakers had kept adequate stock going into the Chinese New Year but the coronavirus outbreak and resulting lockdown means production of BS-VI vehicles could get impacted.
India switches to the low-emission BS-VI fuel from April 1, 2020. After March, carmakers will not be allowed to sell vehicles optimised for the older BS-IV fuel.
Many carmakers have already launched BS-VI models but some are yet to ramp up production.
In a recent statement, Hero MotoCorp had said that because of the unforeseeable challenges on parts supply from China, its BS-VI ramp-up was affected.
"This has resulted in a high de-growth in our billing volume for February and our dealer inventory is, now, under 10 days. Going into March, we anticipate the challenge on parts-supply to continue for another few weeks, before we get back to normalcy," Hero added.
“Manufacturers are exploring alternatives to fulfill 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,” said SIAM President Wadhera.
Wadhera added that SIAM has been in touch with the government with specific recommendations on behalf of the automobile industry and in this regard.
Further, the China disruption is expected to also impact the nascent electric vehicle industry as a majority of EV makers import lithium-ion batteries from China.