Tuesday, June 16, 2020
By Manoj Kumawat
Auto Makers Like Maruti Suzuki, Bajaj, Favour The Use Of Chinese Parts
Despite the announcement of “Aatm Nirbhar Bharat Yojna Package” by honorable Prime Minister of India, Narendra Modi, leading auto manufacturers like Maruti Suzuki India Limited and Bajaj Motors have resisted the decision of increasing tariffs on the imports of Chinese products in the country. According to the sources of MSIL, the import of Chinese components for manufacturing the vehicles, especially for the suppliers of these products. The sources said that the decision has been taken without assessing its impact on Indian customers. In the statement made by Indo-Japanese carmaker Maruti Suzuki India Limited, “The Prime Minister has made has made doing business in India 'Infinitely Better', but FDI is still not coming. India hasn’t been able to attract major manufacturing FDI over the last 70 years and policies in India have not been designed to promote competitiveness.”
Commenting on the existing situation domestic two-wheeler manufacturer Bajaj Motors said that imports constitute an important role in the smooth supply of the raw materials. The company sources said, that alloy wheels used in the manufacturing of the motorcycles are imported from China due to their competitive pricing. The decision on increasing the tariff on the imports from China comes after increasing disputes between the borders of both countries.
Industry experts believe that this decision could disturb the emerging technologies being introduced in the auto industry, especially the production of electric vehicles. It is speculated, that with India concentrating on increasing the use of electric vehicles the industry might face severe issues. The most important matter of concern is the cost of battery installed in the electric vehicles, which is almost 50% of the total cost of the vehicle. Moreover, among the five largest manufacturers of the batteries used in the electric cars in the international market, two manufacturers are from China itself, while the remaining three are directly or indirectly dependent on the Chinese support for manufacturing the batteries.
Going through all these issues, the auto industry might face serious problems in the coming years.
