Virus to hit production of BS VI vehicles: Siam

With the lockdown in China due to deadly Coronavirus or Covid-19 critically hitting production of BS VI compliant vehicles in India, most of the manufacturers are now looking at alternate sources to replace Chinese suppliers.

The shutdown is also likely to hurt production of electric vehicles in the world's fourth biggest automobile market.

Automakers in India have to transition to new stringent BS-VI emission compliant vehicles from April 1.

"With the anticipation of the Chinese New Year, Indian auto industry had maintained inventory in beginning of the year, but with the current lockdown in China, supply for BS VI vehicles is likely to get impacted," Rajan

Wadhera, president at Society of Indian Automobile Manufacturers, or Siam, said in a statement on Wednesday. This is the first time the trade lobby group for automakers has acknowledged the disruption in production caused by the shutdown in China.

This also points to the direct or indirect reliance on China when it comes to sourcing of parts by vehicle makers and their suppliers.

Major automakers such as Tata Motors, Mahindra and Mahindra, Hero MotoCorp, TVS Motor Company, among others, have witnessed disruptions in supply chain management due to Covid-19.

Manufacturer of diesel passenger and commercial vehicles and two-wheelers are likely to be hit in the coming months due to lack of supply of integral components for BS VI compliant engines such as catalytic converters and fuel injection pumps.

Wadhera said automakers import about 10 per cent of their raw materials from China and disruption in availability of these parts are likely to critically hamper production across all segments and gravely affect electric vehicles.

Most of these manufacturers are now looking at alternate sources to replace Chinese suppliers but that might take a few months due to the regulatory approvals needed.

Of the top eight countries India imports automotive components, China has the largest share - 26 per cent, followed by South Korea 13 per cent, Germany 12 per cent, Japan 9 per cent, USA 4 per cent, Thailand 6 per cent, Singapore 5 per cent and Italy 3 per cent.

Vinnie Mehta, director general at Automotive Component Manufacturers Association, says in FY2019, the value of imports of components from China was $4.5 billion.

India imports a range of parts from China covering drive, transmission and steering; engine parts; electricals and electronics; suspension and braking; cooling systems and vehicle interiors, he said.