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The Society of Indian Automobile Manufacturers has said that one could expect a delay in production of vehicles because of component import restrictions imposed on China.
All components that are imported from the Orient are now subject to manual inspections that will result in delays in clearance certificates. This new development adds more stress to an already unsteady supply chain in the Industry.
Mr Rajan Wadhera, the President at the Society of Indian Automobile Manufacturers (SIAM) said, "Inordinate delays in clearance due to congestion at port could eventually impact manufacturing of vehicles in India. The industry is piecing itself together as growth is limping back; any further disruption at this juncture is best avoided."
Mr Deepak Jain, the President at the Auto Component Manufacturers Association (ACMA) said, "The automotive value chain is a highly complex, integrated and interdependent one; non availability of even a single component can, in fact, lead to stoppage of the vehicle manufacturing lines."
"Post the lockdown, production in the component industry is gradually picking up in tandem with growth in vehicle sales, it is therefore in the best interest of the industry and the economy that any further disruptions are best avoided," he added.
The automotive supply chain in India is valued at roughly USD 118 billion out of which imports of components account for USD 4.75 billion, which is approximately 4 percent of the total Auto Industry turnover.
The Society also said that some critical components like parts for engines and other electronics are imported from China, and are still unavailable with domestic component manufacturers.
While locally manufactured models in a company's lineup will be able to survive the situation, completely knocked down models that are dependent on imported components will be impacted, especially in the premium segments.
Thoughts About The Predicted Delay In Production Of Vehicles
Well this isn't good news at all. While we understand the emotions behind adding import restrictions, enforcing them on an almost immediate basis, will impact the industry at a time it finds itself battling a pandemic and a financial recession. The Government needs to address this concern on an immediate basis before the Industry needs a second bail out.