The operations of home car producers might get additional impacted if the lockdown in a number of cities of China, together with Shanghai, to examine Covid-19 infections will get extended.
The international semiconductor scarcity has already compelled unique tools producers (OEMs) to take manufacturing cuts. The provide chain disruptions because of a number of Covid-19 waves and the current Russia-Ukraine conflict haven’t helped the matter both.
Honda Motorcycle & Scooter India president, MD and CEO Atsushi Ogata just lately advised FE that the corporate is witnessing some affect on the manufacturing of some of its fashions, which use smaller chips imported from China, as actions have been suspended on the Shanghai port.
“But the impact of Shanghai lockdown is a recent one. The major problem is chip shortage, not only for Honda Motorcycle & Scooter India but all the automakers globally,” Ogata stated.
A Tata Motors spokesperson stated that the auto business, specifically, continues to battle with a worldwide scarcity of semiconductors, and whereas there’s enchancment in current months, it stays unsure within the quick time period.
“We continue to remain agile and flexible to the evolving situation and apply smart allocation across models to maximise production. We have also developed an alternate architecture for the affected parts and collaborated with the supplier partners to fast track the de-risking measures. For the future, we are working towards developing complete visibility of the supply chain through tiers and diversifying risk/s,” the spokesperson added.
Saket Mehra, companion and auto sector chief, Grant Thornton Bharat, stated as Chinese imports cater to the Indian car, metal and electronics sectors, any lockdown will end in a direct affect on these sectors.
“Notably, the auto components imports in the Indian market grew 71% to $ 8.7 billion in H1 FY22 as compared to $5 billion in H1 FY21. China accounts for more than 26% of these imports, especially the electronic and metal components. Around $9 billion worth of electronic components (across sectors) are imported from China, which will also take a toll if lockdown continues for an extended period of time,” Mehra stated.
Suraj Ghosh, director, S&P Global, advised FE that if the lockdown curbs persist and regular manufacturing doesn’t begin within the subsequent few weeks, India’s auto business will likely be liable to manufacturing hits, as a number of digital elements and sub-components are sourced from China.
“There could be a double-pronged impact. Not only could there be a risk of shortage of some electronic and other components, but ship availability could become a concern, leading to a hike in freight costs,” Ghosh famous.
Source: www.financialexpress.com”