China’s industrial lockdown due to COVID-19 has disrupted India’s automotive supply chain, leading to Indian automobile manufacturers running out of their imported components inventory.
At a time when the automobile industry in India is going through a slowdown, the COVID-19 epidemic has now acted as another disruption. Rajan Wadhera, President of the Society of Indian Automobile Manufacturers, has issued a public statement today stating that many automakers in India import as much as 10 per cent of their components from China. And while India had braced for the closing of the Chinese automobile industry for the Chinese New Year, there was naturally no preparation for the continued shutdown of the Chinese auto industry because of the novel Coronavirus, simply because there was no knowledge about its outbreak at the time.
But the continued lockdown in China has now has led to a disruption in parts supply across the board for Indian automobile manufacturers ranging from passenger vehicles, two-wheelers, commercial vehicles, three-wheelers and electric vehicles.
Wadhera has further mentioned that automobile manufacturers in India are now looking at alternative sources to fulfil their parts requirements but such a shift in operations requires considerable time and preparation to set up a new supply chain. And then there is the matter of it reaching the required scale of operations, given that new components are required to meet regulatory testing.
This disruption in production could lead to a short supply of new cars, motorcycles, scooters and commercial vehicles in India in the near future, which will further add to the slowdown in the automotive market.