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Coronavirus Outbreak in China impacting parts supply; says Tata Motors, M&M, MG Motor

CIOInsider Team

Bengaluru, India – 2nd March, 2020: Indian automakers Tata Motors, Mahindra and Mahindra Ltd, and MG Motor said they are confronting challenges in the supply of component parts from China, as fallout from coronavirus epidemic mounts.

"Due to the unforeseeable challenges on the parts-supply from China, our BS VI ramp-up has been affected," said Veejay Ram Nakra, Chief of Sales and Marketing-Automotive Division, M&M. The company has reported a 42 percent decline in total sales at 32,476 units in February. It is anticipated to continue the challenge in the month of March, for another few weeks, before getting back to normalcy, added Veejay.

Tata Motors published a press release claiming that it is working hard to recover from the supply disruptions caused by coronavirus outbreak in China, and is devising plans to mitigate the

situation. "Not only the outbreak of Covid-19 in China, but a recent fire incident that occurred at one of our strategic vendors disoriented Tata's vehicle production and wholesale at volumes," said the President of Passenger Vehicles Business Unit of Tata Motors, Mayank Pareek. The company has reported a decline of 34 percent in domestic sales at 38,002 units in February, in contrast to 57,221 units which are sold in the same month last year.

In February, MG Motor India also was struck by a lower retail sale of 1,376 units, affecting the company’s European and Chinese supply chains. Rakesh Sidana, Director – Sales, said in a statement that the MG ZS EV has received remarkable response in the debut month recording a 150 units delivered to the customers already.

Other major automobile manufacturers in India such as Maruti Suzuki, Hyundai, and Toyota Kirloskar Motor have not witnessed any critical impact on their production schedule. However, the companies keep a close watch over the situation, mostly with the operations of their major suppliers. “We do not foresee any problems with the supply chain as of now. We will certainly keep in touch with our suppliers and ensure in making it come to our notice,” a Maruti Suzuki India spokesperson told.

"The company’s first and second tier suppliers are not yet affected. However, we continue to monitor the operations of third and fourth tier suppliers. Thus it helps to grasp any possible slowdown that may come forth because of anything that hampers the logistics flow from China, especially Wuhan," Naveen Soni, Senior Vice President - Sales and Service, Toyota Kirloskar Motor said.

A rating agency, Icra, said last week that the domestic automobile industry would severely hit worst slumps over the production and supply chain if the coronavirus outbreak in China and South East Asia continue longer. So far, around 3000 people have lost their lives in China due to the disease. Other countries which have recorded cases of coronavirus include South Korea, Japan, Italy, and Singapore.

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