Left Menu
Development News Edition

India auto production to shrink by 8.3 pc in 2020; coronavirus spread may hit supply chain: Fitch

PTI | New Delhi | Updated: 12-02-2020 11:57 IST | Created: 12-02-2020 11:31 IST
India auto production to shrink by 8.3 pc in 2020; coronavirus spread may hit supply chain: Fitch
Image Credit:

Fitch Solutions on Wednesday said it expects vehicle production in India to contract by 8.3 percent in 2020 as the auto industry faces increasing risk of a supply shortage due to China's coronavirus outbreak, possibly hitting domestic output if the virus spreads in the country. In China, where the virus originated, automotive manufacturers have halted production in order to limit the congregation of people and reduce the exposure of its population to possible infection and "we see India adopting similar policies if the virus spreads throughout the country," it said.

Given that India's health care system is ill-equipped to deal with a large scale epidemic, the rating agency said: "the impact on Indian autos will be much larger because the virus will likely spread much faster in the country when compared to China". Furthermore, because China is one of India's largest supplier of automotive components, a slowdown in the supply of China-made components will lead to shortages in India and could force auto makers to slow or stop production.

As a result, we forecast vehicle production in India will contract by 8.3 percent for 2020, following an estimated contraction of 13.2 percent in 2019. The agency said that it believes that the weak domestic demand for new vehicles will see India's vehicle production continue to contract in 2020.

"China supplies India with between 10-30 percent of its automotive components, and this could be two to three times higher when looking at India's EV segment, which highlights just how exposed India's automotive manufacturing industry is to the slowdown of vehicle Chinese component manufacturing," it said. Fitch also believes that the protectionist policies presented in the country's 2020 Budget with regards to electric vehicles will offer some upside potential for local EV production, but it will be accompanied by increased trade risk.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.



Workforce has embraced remote working and hyperlocal coworking spaces: GoFloaters CEO & COO

GoFloaters pay-as-you-use service with flexible plans is the best-suited model for on-the-go workforce segment, say Shyam Sundar Nagarajan, CEO, and Srivatsan Padmanabhan, COO....

'Diya jalao' for COVID 19: Modi needs to practice his teachings and control fake news on social media

In his video message to the nation on Friday the Prime Minister talks about peoples collective power to win the invincible. However, he has made no concreate efforts to win over the confidence and represent the collective power of the polit...

Tourism post-COVID 19: Lessons learned, out-of-box strategies to ensure the revival

In the pre-COVID 19 period the tourism industry was seen with much hope throughout the world. However, the COVID 19 pandemic has completely paralysed the tourism industry and its dependent sectors. The tourism industry in the post-COVID 19 ...

Cybersecurity post-COVID 19: More internet means more threats, stay alert folks!

When supported by adequate digital awareness campaigns and more crackdowns on cybercrimes, increased internet usage will help more people embrace technology and better understand the risks, bringing us closer to unleashing the true potentia...


Latest News

Puducherry CM urges people to respond to PM's call

Puducherry Chief Minister V Narayanasamy on Friday appealed to the people of the union territory to respond to Prime Minister Narendra Modis call for lighting a candle or lamp on April 5 to demonstrate the countrys collective will to fight ...

Coronavirus: SC takes note of condition of children homes

The Supreme Court, on its own, took note on Friday of the condition of the children in protection, juvenile and foster or kinship homes across the country amid the coronavirus outbreak and issued directions to the state governments and vari...

Elected representatives have important role in containing spread of coronavirus: Lok Sabha Speaker

Lok Sabha Speaker Om Birla on Friday spoke to presiding officers of legislative assemblies over phone and discussed the prevailing COVID-19 crisis. He emphasized that the role of peoples representatives in containing the infection is import...

India to take part in WHO's 'solidarity trial', says ICMR

India will participate in the World Health Organisations WHO multi-country solidarity trial for developing potential treatments and drugs for COVID-19, the Indian Council of Medical Research ICMR said on Friday. ICMR will collaborate with W...

Give Feedback