Carmakers are facing issues from multiple fronts due to the coronavirus outbreak. While it started in China, recent developments in Italy, Iran and South Korea are worrying, and even the US is on its toes now. This will naturally dampen the economy, and auto sales, but a more immediate problem facing carmakers is parts supply.
Globalisation means that the many parts needed to make a car come from everywhere in the world, and China as the “world’s factory” accounts for a big portion of that. Outside of China, Hyundai and Nissan have announced temporary factory shutdowns in their homeland due to the lack of parts, and UK-based Jaguar Land Rover has been affected too.
Now, Indian carmakers are reporting parts supply disruptions from China. According to Reuters, India’s Mahindra and Tata said their supply of parts from China had been hit.
“Going into March, we anticipate the challenge on parts supply to continue for another few weeks, before we get back to normalcy,” said Veejay Ram Nakra, Mahindra’s sales and marketing chief. Tata said in a press release that it also has been hit by supply disruptions due to the coronavirus outbreak in China, and is working to mitigate the situation.
Both Mahindra and Tata, along with market leader Maruti Suzuki, reported a decline in year-on-year February sales. Mahindra’s domestic sales are down 42%, Tata reported a 34% drop, and Maruti sales are down 1.6% compared to the second month of 2019.
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