Coronavirus Impact on China Parts Supply and Indian Aftermarket

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Good news first : According to Reuters news, Honda, Nissan, Renault are resuming their manufacturing unit in Wuhan / Hubei province.  China’s factories are beginning to come back to life after an extended lockdown in the country’s industrial hubs, and that is good news for several Indian carmakers that have their supply chains located beyond the Great Wall.

India import about 10 per cent of their raw materials from the neighbouring nation.

China is the world’s biggest car market, and Wuhan, the city at the center of the outbreak, is known as a “motor city” for being home to auto plants including General Motors, Honda, Nissan, Peugeot Group and Renault. For Honda alone, Wuhan accounts for about 50% of total production in China. In 2019, Hubei Province, of which Wuhan is the capital, was the fourth-largest car producer in China, with about 10% of the country’s car-making capacity and produced 2.24 million vehicles.
ALTERNATIVE SOURCE & OPPORTUNITIES IN INDIA

The auto industry body said disruption in availability of these parts is likely to critically hamper production across all segments, namely passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and gravely affecting electric vehicles.

Manufacturers are exploring alternatives to fulfil their supply chain demands but that would also take a substantial amount of time to reach stable production scale as these components would need regulatory testing.

IMPACT ON ELECTRIC VEHICLES

Many automakers are already struggling with supplies of electric-car batteries. China is a major global leader in refining cobalt, currently an essential ingredient in EV batteries. A sustained impact on Cobalt processing facilities could affect electric-vehicle costs.

The bulk of the world’s lithium comes from China. Impacts from the coronavirus led Chinese lithium producer Ganfeng Lithium, which supplies Tesla and Volkswagen, to raise prices, although by less than 10%.

https://www.just-auto.com/

https://electrek.co/2020/03/10/coronavirus-threatens-momentum-for-electric-vehicles/

https://www.weforum.org/agenda/2020/02/coronavirus-china-automotive-industry/

https://www.autox.com/news/industry-news/coronavirus-puts-indian-automobile-industry-on-the-back-foot-107434/