Tata Motors on Wednesday said clarity about supply constraints of components from China will only emerge by the next week, when workers in the coronavirus hit country are expected to rejoin the work.
The company, which imports certain components for both Nexon EV and other traditional models from China, said if the workers don't join work next week then it could lead to supply issues for not only for Tata Motors but for the entire global automobile industry.
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Tata Motors CEO and Managing Director Guenter Butschek told PTI on the sidelines of the Auto Expo that the auto major may not be impacted in value terms due to high degree of localisation but delay in some components could have an impact on the delivery schedule to customers.
"The situation we have is very unfortunate...because the whole magnitude of the coronavirus is not known yet, between the expected return to work beginning of next week or possible further delay in return to work (in Chinese factories)," he said.
Butschek further said even if they return to work it is unclear what is going to be the turnaround time and there would be certain delay against demand even when factories return to full capacities.
"We hope to learn more based on the assumption of their returning to work beginning of next week. Today, we cannot even call our regular contacts because they are not on work so we are kind of blindfolded. We need to wait for the information to emerge," he said, adding the company is still positive as it had stocked up parts supplied from China ahead of Chinese new year.
Stating that the problem is not unique to Tata Motors, Butschek said it is an issue of all players, it will particularly hit the Chinese players even harder because they are fully dependent on supply out on China as they are also dependent parts for regular internal combustion cars.
"Next week is really going to be decisive and it is going to be comprehensive if China resumes operations. Then we learn it fast and if they can tell what is where," he added.
Butschek further said, "Tata Motors may have an impact, we don't know yet".
He said the company is maintaining order intake for Nexon EV and asking customers for some patience.
Besides Nexon EV, Tata Motors also source couple of components which are key products like sunroof and premium hatchback Altroz' electric powertrain system manufactured by Bosch in China.
Disclaimer: No Business Standard Journalist was involved in creation of this content
