Indian automotive production fell -18% on-year in February to 1.65 million units, according to a Society of Indian Automobile Manufacturers (SIAM) note seen by Kallanish.
Passenger vehicle sales fell -7.6% to 251,516 units.
In the 11 months through February Indian automotive production slumped -13% on-year to 20.5m units, maintaining the same declining rate as after ten months. Passenger vehicle sales dropped -15% to 2.63m units.
Earlier this month SIAM president Rajan Wadhera said reduced sales are due to the economic slowdown and lower production of BS-IV class vehicles, which are not permitted to be sold after 1 April.
“Supply chain disruptions from China are also a concern, which may impact the production plans for companies going forward,” he added. “The auto industry is grateful to the government for issuing a notification of force majeure for coronavirus and 24×7 clearance of shipments at all customs formations.”
Indian auto ancillaries and original equipment manufacturers import around 27% of key input materials from China, according to India Ratings & Research. “The extended production halts in China after the Chinese New Year due to a substantial rise in Covid-19 affected population have created supply-side risks for domestic auto companies,” the credit rating agency says.
The industry could look alternatively at sourcing components either locally or from other countries such as Germany, South Korea, Japan and Thailand, which now account for around 33% of total input material imports. But this would be costly and supply may be insufficient to meet demand.
With India going into a three-week nationwide lockdown from 25 March, it is unclear how much automotive production will be able to continue in the nation. Manufacturers such as Maruti, Hyundai, Honda, Suzuki, TVS & Tata Motors have already opted to temporarily suspend their operations.
