New Delhi/Mumbai: The Union government is exploring the possibility of airlifting automotive parts from China to ease a shortage caused by the closure of factories there due to the Covid-19 epidemic, said three people directly aware of the development.
In line with the plans, the ministry of heavy industries, the nodal ministry for the auto sector, has prepared a list of crucial parts for petrol and diesel as well as electric vehicles that can be airlifted from China in consultations with automakers and industry body Society of Indian Automobile Manufacturers, the people said, requesting anonymity.
“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," said an executive at a leading automaker and one of the three people cited above.
However, electric vehicle makers in India may be forced to halt production in April and May because of the ongoing shortage of parts from China, which tends to be the single source for several critical components for such vehicles, the executive said. 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 heavy industries ministry and other nodal ministries haver sent the list of proposal to the aviation ministry, which would carry out the plans, if approved, along with airlifting of parts for mobile phones and drugs, a senior government official said separately.
The list of parts submitted by automakers include for Bharat Stage-VI engines and electric vehicles whose localisation levels are currently low.
Vinodkumar Ramachandran, India head for industrial and automotive sectors at KPMG Advisory Services Pvt Ltd, said if Covid-19 does not spread to other provinces in China, production of auto parts would stabilize there by Q2 FY21. “However, in the context of India, once the adequate stocks are consumed, the shortage of parts supply from China could have a cascading impact on vehicle production. Meanwhile, for EVs, cell manufacturing has a consolidated presence in Asia across China, Japan and Korea. Spread of Covid-19 puts cell supplies on the line," he added.
Tata Motors Ltd and Mahindra Electric Mobility Ltd did not respond to queries from Mint.