China virus outbreak could hit transition to BS-VI

NEWDELHI/MUMBAI: The coronavirus outbreak in China threatens to upset the Bharat Stage-VI transition plans of the Indian automobile sector—particularly makers of diesel vehicles and two-wheelers—several industry executives said.

Automobile parts, such as catalytic converters, particulate filters and fuel injection systems, which are integral to a BS-VI engine, are directly or indirectly imported from China and the virus outbreak could disrupt the supply chain.

Companies, including Tata Motors, Mahindra and Mahindra, Hyundai Motor India, Kia Motors India, Hero MotoCorp, TVS Motor and others in the segment, are likely to witness a production cut, as manufacturing activity in China and in some parts of South Korea has been affected, said four people aware of the development.

Most of the above-mentioned

SOME AUTOMOBILE PARTS, LIKE FUEL INJECTION SYSTEMS, WHICH ARE INTEGRAL TO A BS-VI ENGINE ARE IMPORTED FROM CHINA

vehicle manufacturers are now searching for alternative sources to source the components, which is likely to take some time. Tata Motors has already informed its stakeholders about a possible production hit while it looks for alternatives. South Korean vehicle manufacturer Hyundai is also expected to reduce production as its plants in Korea have shut down.

On the other hand, manufacturers of components, such as Continental AG and Bosch, mostly import the parts from China and other countries. Hence, HeroMotoCorp and Chennai-based TVS Motor have guided for a 10% cut in production during the current month.

Most manufacturers in the Indian market will be directly or indirectly impacted by the shutdown in China, but the lack of engine parts is likely to slowdown the production of BS-VI compliant products.

“Hyundai Motor India Ltd has smooth product operations as per business plans, and has not seen any impact as of now. As a matter of prudence, the situation is being monitored closely, and any necessary action may be taken as per the market situation,” said a Hyundai spokesperson.

A Tata Motors spokeswoman said the company will not be able to respond on the developments.