Curbs on Chinese imports to hit mfg ops: Auto cos

NEW DELHI: After telecom, the auto industry has raised a red flag over sudden restrictions on imports from China and subjecting parts and consignments to rigorous checks at ports, saying this would disrupt manufacturing in the sector at a time when it is struggling with the corona-induced slowdown.
The objections have been made by companies as well as industry associations, which are saying that curbs will hinder operations as many critical parts related to new emissions norms such as BS6 as well as those related to electric vehicles, come from China. Almost all the companies, ranging from Maruti to Hyundai to Mahindra & Mahindra and Tata Motors, will be impacted and so would be two-wheeler makers like Hero Moto.
The situation is worse for Chinese companies such as MG Motors that sources petrol engines and many other parts from China, apart for key components for its electric vehicle ZS.

Both the industry associations, ACMA (of parts makers) and Siam (auto companies) have expressed their reservations.
“The difficulty that is going to come from stopping of China sourcing is for all the BS6 models,” Rajan Wadhera, president of Siam, who is also a senior functionary of Mahindra & Mahindra, told TOI.
ACMA president Deepak Jain said production at factories would come to a halt if the parts are not available freely. “Some of the items imported from China are critical components such as parts of engines and electronics items for which we are yet to develop domestic competence. The automotive value chain is a highly complex, integrated and inter-dependent, non-availability of even a single component can, in fact, lead to stoppage of vehicle manufacturing lines,” Jain said.
Sources said the government’s action to ban a majority of Chinese apps may also result in certain action against Chinese companies in the manufacturing sector. “It is not easy to develop alternate sourcing base in locations such as Europe. Their costs are high, they lack scale, and coronavirus has meant that their production is limited,” an industry official said.
Hero Moto said it is assessing the situation. “We are de-risking ourselves by building inventory and developing alternate sources quite rapidly. However, some of our suppliers have significant exposure to China and the impact of immediate restriction on import of parts from that country is being assessed,” a spokesperson said.

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