Parts of vehicles are in short supply
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India’s leading automakers —Mahindra, Tata Motors and Hero MotoCorp—admit that the coronavirus outbreak has hit production and supply of spare parts. The sector saw sales decline by 15 percent in the April-January period.
“Our BS-VI ramp-up has been affected because of the unforeseeable challenges on parts-supply from China,” says Veejay Ram Nakra, chief of sales and marketing, automotive division, Mahindra & Mahindra. “This has resulted in a high de-growth in billing volume for February and our dealer inventory is now under 10 days. We expect the challenge on parts-supply to continue for a few weeks.”
“There are thousands of parts that make a vehicle, and even if one or two don’t come on time, production gets held up,” says Vinay Piparsania, consulting director–automotive, Counterpoint Technology Market Research.
With the Indian government making it compulsory for automakers to sell BS-VI models from April, many would have already built up a buffer, especially of spare parts. “It’s a complex situation, but automakers are certainly going to look at alternative strategies in terms of sourcing,” says Piparsania. “Hopefully, the situation will improve in the next few months as China has restarted operations.”
(This story appears in the 27 March, 2020 issue of Forbes India. To visit our Archives, click here.)