On March 5th, according to Reuters, the Indian government said that in order to try to control the negative impact of China’s new coronavirus on the domestic automobile supply chain, it has planned to arrange air shipment of components from China.
According to sources, the Automotive Component Manufacturers Association of India has contacted its members to assess which parts are in short supply and which types of parts are suitable for air freight.
It is worth noting that the automotive industry accounts for 49% of India’s manufacturing GDP. Although India also has its own auto parts companies, it currently relies heavily on Chinese suppliers for parts such as electronic components, pressure sensors and injectors.
Data show that in recent years, India’s total price of parts imported from China has been rising. Taking fiscal year 2019 as an example, the total value of India’s auto parts imports from China has reached US $ 4.6 billion, accounting for more than a quarter of India’s parts imports. In the first six months of this fiscal year, imports from China The amount has reached $ 2 billion.
Indian tractor manufacturers Mahindra & Mahindra and Tata Motors said Sunday that their supply of parts from China has been hit hard.
“As we enter March, we expect that the challenges of parts supply will continue for a few more weeks before returning to normal,” said Veejay Ram Nakra, Mahindra ’s head of automotive sales and marketing.
And Jaguar Land Rover, a subsidiary of Tata Motors, has extended downtime at its China plant and required 3,000 employees to work from home. The joint venture Chery Jaguar Land Rover’s factory is located in Changshu, only 800 kilometers away from the outbreak center Wuhan.
Gata Motors said the company was hit by a supply disruption due to a coronavirus outbreak in China, and the company is working to alleviate the situation.
China is India’s largest trading partner, but data from the Ministry of Trade show that India’s imports from China in February fell to their lowest level in almost four years. In fact, not only the automotive industry, China’s supply of pharmaceuticals and electronics to India also accounts for a very large proportion.
For example, 65% of India ’s R & D drugs are imported from China. Among them, acetaminophen, which constitutes 80% of its active ingredients, comes from China.
At the same time, another industry that has been hit by the epidemic is India’s electronics manufacturing, especially smart phones. Consumer electronics are clearly a sales highlight in India’s e-commerce sector, and India has also become one of the countries with the “highest proportion of smart phone e-commerce sales” in the world. However, India still relies heavily on the Chinese market for components such as camera modules and displays.
An Indian official said that the Federal Ministry of Science and Technology had asked the electronics and smart phone industries to prepare a list of parts made in China and then send them by air. The official said that air parts from Guangzhou and Shanghai were an option the government was discussing.
According to Reuters, shipments of even those parts that are still being produced have been affected by the lack of truck drivers, the surge in highway checkpoints and the shortage of Chinese port workers. To protect the health of the crew, air cargo companies have also significantly reduced their services.
A government consultant who is directly involved in logistics planning said that the Indian Embassy in China will assist in coordinating the distribution of pharmaceutical ingredients by air from China.
The good news is that in order to deal with the closure of Chinese factories during the Spring Festival holiday, Indian smart phone manufacturers have accumulated a large number of parts inventory, and so far, they have basically survived the “virus crisis.”
But these stocks may soon be “dried up”. S.N, co-founder of Lava, a local smart phone maker in India. Rai said that supply of some parts has been restored, but production at the company’s factories in the suburbs of New Delhi will slow significantly.
“Production will become very difficult between March 10th and March 20th,” Rey said. “In the case of insufficient supply, we may have to reduce one or two shifts three times a day.”