The Association of Indian Forging Industry (AIFI) has said disruption in supplies on account of coronavirus outbreak in China has hit Indian forging industry along with automobile and auto component manufacturing sectors. Automobile industry had already reduced their production rate due to the market conditions and on account of the impending change over to BS-VI emission norms from BS-IV from April this year. The problem is further aggravated by the Chinese government's suspension of shipments by sea until further notice and allowing air shipments only. Air shipments are not suitable for auto components and forging industries, therefore the Indian OEMs (original equipment manufacturers) are unable to plan production beyond the inventory as currently available to them.
AIFI said China is one of the leading suppliers of auto components in India, accounting for 27 per cent of the total exports, and the slowing supply of components manufactured there would result in shortage of stocks in India. Forging industry primarily caters to the $57 billion automotive industry. The association represents around 400 forging units with a cumulative annual production of 3 million tonne.
It said that the impact of the supply disruption will be more profound on passenger vehicles, commercial vehicles and two-wheeler segments. Currently, the OEMs have reduced their production plan for February and March due to non-receipt of components. It also stated that international customers have asked for shipments to be delayed till further advice as their supply lines are facing adverse impact of disruption caused due to shutting down of manufacturing facilities temporarily in China.