Auto and Consumer Companies are Increasing Imports Because of Supply Concerns

Automobile and Consumer Goods Manufacturers in India are increasing imports to stock up on raw materials, components, and finished goods for the upcoming festive season, as rising Covid cases in China raise concerns about new restrictions that could stymie global supplies. Electronics firms said they are increasing imports by 30-35 percent despite low demand and production cuts in the last two months due to inflation, fearing tighter restrictions in China and an increase in shipping rates that could harm their holiday season inventory.

Despite inflationary pressures, demand for passenger vehicles remains strong, but customers may have to wait longer if the supply situation worsens, according to industry executives.

While supply constraints have eased compared to last year, visibility on availability of components, particularly semiconductors, remains low due to global uncertainties, according to Maruti Suzuki and Hyundai Motor India.

The two companies have combined bookings of nearly half a million units, with the order book expected to grow even more during the upcoming holiday season.

"For the first time in the Indian automobile industry, we have had two consecutive quarters with sales of over nine lakh units. But there are supply-side issues. While demand parameters remain strong, the situation will become clearer once production increases," said Shashank Srivastava, senior executive director (marketing and sales) at Maruti Suzuki India.