In a first, Tata Motors Ltd has admitted the impact on its India production due to supply chain challenges from China, the country of origin of COVID-19.
In an official statement released on Sunday, Tata Motors' spokespersons for the commercial and passenger vehicles business units said that the vehicle production is affected due to the Coronavirus outbreak in China. The pandemic is now spreading to the other countries including South Korea, Italy, France and others.
Last Friday, the organisers of Geneva International Motor Show said that the popular industry event stands cancelled on the new guidelines issued by Switzerland's Federal Office of Public Health on Feb 28. Geneva International Motor Show was scheduled to open for media on Monday or March 2.
Several companies in the automotive value chain globally are restricting international travel of their employees. Major automakers globally have initiated supply chain risk assessment while re-routing their requirements to other countries from China.
Meanwhile, Tata Motors said on Sunday February domestic sales stood at 38,002 units, down 34% yoy. That included total commercial vehicle (CV) sales of 25,572 units as against 39,111 units sold a year earlier.
Girish Wagh, president of CV business unit at Tata Motors said that while the company is on track to migrate to BSVI emission norms with BSIV stocks being consumed per plan, the supply disruptions from the outbreak of Coronavirus in China could impact the BSVI transition in India.
"The supply disruptions from the COVID-19 outbreak in China could have some impact on the BSVI transition and all efforts are underway to mitigate it," he said in the official statement.
Meanwhile, the company's passenger vehicle sales stood at 12,430 units in February, down 31% YoY. President of passenger vehicle business unit Mayank Pareek said that although the company has received strong response to its recently launched premium hatchback Altroz, production of BSVI vehicles is marred by the difficulty in sourcing parts from China.
"The outbreak of COVID-19 in China and a recent fire incident at one of our strategic vendors affected the vehicle production and wholesale volume. Multiple actions are being taken to reduce the impact," he said referring to the recent fire incident at Varroc Lighting Systems Pvt Ltd's Hinjewadi plant in Pune.
A Mint report dated Feb 21 had warned that fire accident at Varroc's Pune plant could severely hit the supplies of key vehicle manufacturers including Tata Motors, Mahindra and Mahindra Ltd, Volvo Eicher Commercial Vehicles, and others.
Disruption in the supply of critical components from China could specifically impact the production schedules of BSVI vehicles in India, Mint reported last week.
A host of automotive components such as fuel injection systems, sensors, fuel pumps, electrical and electronic parts, engine control units, semiconductor based assemblies and child parts, displays for infotainment systems and others are imported from China.