Govt plans to lift China's auto parts to alleviate shortages
Govt has set up a list of main parts for both petrol / diesel cars and EVs also Ministry of the heavy industries and other nodal ministries submitted the list of proposals to the Ministry of Aviation
The Union government is seeing the option of airlifting automotive parts from China to mitigate a scarcity caused by the closure of factories there due to the Covid-19 epidemic,
The Ministry of Heavy Industries, the nodal ministry for the automotive sector, has prepared a list of main parts for oil and diesel as well as electric vehicles that can be airlifted from China in consultation with the automakers and industry body Indian Automotive Manufacturers Society.
The heavy industries ministry has made a list of components which can be airlifted for both set of vehicles. Otherwise, there will be shutdown of assembly lines. Also, the orders from China come with a lag of three to four months, and factories have been shut since February. So, the next few months will be a washout, according to an executive at a leading automaker.
However, electric vehicle makers in India may be forced to halt production in April 2020 and May 2020 because of the ongoing shortage of parts from China, which tends to be the single source for several critical components for such vehicles. And as Sohinder Gill, director general at the Society of Manufacturers of Electric Vehicles and also the chief executive at Hero Electric, explained, lithium-ion cells cannot be airfreighted as they come under the hazardous cargo category.
The ministry of heavy industries and other nodal ministries have sent the list of proposals to the ministry of aviation, which would carry out the plans if authorized, along with the airlifting of cell phone and drug parts, a senior official of the government said separately.
The list of parts automakers submitted include for Bharat Stage- (BS-VI engines) and electric vehicles (EV’s) whose localization levels are currently low.
According to Vinodkumar Ramachandran, India's head of the industrial and automotive sectors at KPMG Advisory Services Pvt Ltd, if Covid-19 did not spread to other provinces in China, auto parts production would stabilize by Q2 FY21 there. With regard to India, however, once the adequate stocks are consumed, China's shortage of parts supply could have a cascading effect on vehicle production. Cell manufacturing, meanwhile, has a consolidated presence in Asia across China, Japan, and Korea for EVs. Spread puts cell deliveries on the line.
