Electronics companies stare at uncertain future

The recent outbreak of the novel coronavirus disease in China may affect Indian electronics and appliances majors’ plans if the pandemic continues to spread till the second half of February.

As a large number of components continue to be imported from the neighbouring country, makers of mobile handsets, air-conditioners, television sets, and refrigerators may face a supply crunch in coming months.

As Chinese officials shut down manufacturing a large number of items, till February 9, local industry bodies like the Consumer Electronics and Applied Manufacturers Association ( CEAMA) and Indian Cellular and Electronics Association (ICEA), and manufacturers are keeping a watch on the developments.

According to Pankaj Mohindroo, chairman of the ICEA, which has all major electronics and handset manufacturers in India as its members, it has issued an advisory to the bodies under its umbrella. “We will monitor the situation every day. If things persist beyond February 10, it will be problem,” he said.

According to Kamal Nandi, president of the CEAMA and executive vice-president of Godrej & Boyce, most companies have enough stocks to last till the end of February. “But if the shutdown in China continues beyond February, then there will be an impact on manufacturing (of appliances) in India,” said Nandi.

Key components like flat panels for LCDS and LED TVS,

printed circuit boards for smartphones, and compressors for ACS and refrigerators are

imported from China.

In the past five years, while the localisation of production of these items has improved with new manufacturing facilities coming up, local manufacturers’ dependence on China for components continues. Lack of economies of scale here kept investors away from setting up large component manufacturing plants. Makers of mobile handsets, currently the largest category by sales value among all consumer electronic items here, are immune to any immediate threat, said industry watchers.