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Old 11th March 2020, 09:32   #1
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Default Covid-19: Supply chain disruptions make car companies airlift parts

The Coronavirus outbreak has disrupted supply chains of electronics parts manufacturers and automakers alike. These companies are reportedly forced to pay very high rates to bring parts from China and South Korea on chartered flights.

Tata Motors has told the media that it would take at least 90 days to replenish their supply chain via normal sea freight. The carmaker is expected to airlift some components in the short term.

Companies in the field of automobiles, pharmaceuticals and consumer electronics depend on the aforementioned countries for import of raw materials. Special charter flights are offered at a premium of 125% compared to the regular cost of US$ 220,000 per 100 tons of cargo.

Prices in the electronics industry have already increased by 3-5% but it is not yet known if carmakers would increase their prices or absorb the increased costs.

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Old 11th March 2020, 11:09   #2
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Default re: Covid-19: Supply chain disruptions make car companies airlift parts

From what I've read, we are almost fully dependent on China, South Korea or Mexico for ECUs. Any idea why Indian auto component makers are unable to manufacture ECUs here? Does ECUs have smartphone-like manufacturing complexity?
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Old 11th March 2020, 11:59   #3
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Default re: Covid-19: Supply chain disruptions make car companies airlift parts

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From what I've read, we are almost fully dependent on China, South Korea or Mexico for ECUs. Any idea why Indian auto component makers are unable to manufacture ECUs here? Does ECUs have smartphone-like manufacturing complexity?
Wasn't Bosch manufacturing ECU's in India?
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Old 11th March 2020, 12:06   #4
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Default re: Covid-19: Supply chain disruptions make car companies airlift parts

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Wasn't Bosch manufacturing ECU's in India?
Found this article:
Bosch electronic control units production in India begins
http://www.motorindiaonline.in/compo...-india-begins/

If we are still dependent on China, then it probably means many sub-components required to build an ECU are still imported.
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Old 11th March 2020, 18:13   #5
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Default re: Covid-19: Supply chain disruptions make car companies airlift parts

Great ! Now car manufacturers can increase prices further which they will conveniently forget to reduce once things settle back to normal. Also I'm sure that even if only some of the components have increased in price they will apply a flat increase on everything
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Old 12th March 2020, 11:15   #6
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

I read somewhere that Tata is airlifting parts too. Maybe for the new Harrier AT?

That's going to be expensive. The Coronavirus is like a body-blow to car manufacturers. Supply chain disrupted, people avoiding public places (including car showrooms) and a generally damp mood right now that isn't conducive to car buying. This, after the already sluggish economy, crashing car sales in 2019 and the BS6 emission norms kicking in.

Not a market for the fainthearted, I can tell you that. And truly bad luck for Hyundai which is launching the Creta now!
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Old 12th March 2020, 11:17   #7
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

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Not a market for the fainthearted, I can tell you that. And truly bad luck for Hyundai which is launching the Creta now!
Not sure about this being applicable to the popular models, like Creta. Read somewhere that the Creta has already garnered bookings in several thousands even before its actually hitting showrooms. While buyer sentiment will be affected to a certain level, the popular models will probably continue to sell well. Have to wait and watch.
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Old 12th March 2020, 11:18   #8
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

It is a wakeup call for the whole world. This is what happens when you are dependent on only one country. I hope the current situation results in the revival of manufacturing outside China.
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Old 12th March 2020, 12:01   #9
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

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Originally Posted by arindambasu13 View Post
Not sure about this being applicable to the popular models, like Creta. Read somewhere that the Creta has already garnered bookings in several thousands even before its actually hitting showrooms. While buyer sentiment will be affected to a certain level, the popular models will probably continue to sell well. Have to wait and watch.
The problem lies with the delivery of the cars, not with the bookings. Buyers can expect massive delays. With no clear cure or vaccine for the virus yet, it will be some time before things bounce back to normalcy the world over.
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Old 12th March 2020, 12:30   #10
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

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It is a wakeup call for the whole world. This is what happens when you are dependent on only one country. I hope the current situation results in the revival of manufacturing outside China.
It is a wake-up call for the whole world to not blindly follow the economists who kept beating the globalization drum.

There was a certain level of isolation and self sufficiency in the previous world that is increasingly being eliminated today.

Today the problem is caused by a medical reason, tomorrow it may be politics.
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Old 12th March 2020, 13:43   #11
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

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Today the problem is caused by a medical reason, tomorrow it may be politics.
Nailed it, learning to do without should be the mantra going ahead, like high demand causes supply to be the king, this should be balanced out with the opposite.

Every country should in-house manufacture/yield 1)agricultural produce 2) medicine 3) clothing, in quantities sufficient for the citizens in full, ideally. Globalization is a first world luxury but certainly isnt a first world problem when nations under the guise of companies can arm-twist other nations to get the terms or price they want.

Sit back and maintain status quo, till this blows over. The economy wont be the same this year, I'd suggest constraint as the key to survive the coming 10 months.
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Old 13th March 2020, 01:02   #12
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

It's definitely a wake up call to promote a TRUE Made/Make in India campaign. It really goes to show how reliant we are on Chinese products and raw materials with the way shops aren't able to restock themselves and even raw materials for medicine production is unavailable. What are we actually making in the country ?
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Old 13th March 2020, 07:55   #13
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Default Re: Covid-19: Supply chain disruptions make car companies airlift parts

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Originally Posted by SmartCat View Post
If we are still dependent on China, then it probably means many sub-components required to build an ECU are still imported.
We don’t make ICs (the brain of the ECUs) or even most of the premium components (automotive grade capacitors, resistors, etc). All of it is imported and “assembled” in India (to reduce costs a bit, mostly as a result of import duty benefits on unfinished goods) and the firmware is loaded here.

At most, maybe some parts of the ECU code is designed in Bosch’ Indian offices. We are far behind in electronics manufacturing.

Last edited by adroit_91 : 13th March 2020 at 07:55. Reason: Grammar
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