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china: Electronics, auto cos hope to weather China curbs for now

A fresh spate of Covid-19 restrictions have impacted production and port operations in some areas of China, but Indian electronics and automobile manufacturers that buy components from China say the development will not impact their business in the upcoming festive season. Most companies said their imports from China have either already reached Indian shores or are in transit, though they fear an impact later in the next quarter after the festive sales are over.

Some like German appliance brands Bosch and Siemens are facing delay in shipments of high-end built-in appliances, microwave ovens, washing machine and cloth dryers due to restrictions in China, and expect them to arrive with a month’s delay.

Neeraj Bahl, managing director of BSH Household Appliances India that makes Bosch and Siemens appliances, said shipments are ready but due to restrictions in China, there are no connecting vessels. “We may lose out on some festive sales, especially the high-end models where supplies are affected,” he said. Apart from disruptions caused due to fresh Covid-19 restrictions, a heatwave in parts of China is also proving to be an additional challenge for manufacturers there.

Ravi Bhatia, president at automobile industry consultancy Jato Dynamics, said China’s zero Covid policy requires special arrangements in production.

“Some factories in China were able to remain open during pandemic lockdowns through the use of ‘closed loop’ systems, where workers would isolate themselves at factories in order to continue operations,” he said. “This is not possible (now) due to the heat.”

China is continuing with its zero Covid policy, locking down cities or districts, or putting strict restrictions, hitting industrial production and impacting global supply chain. The government has indefinitely extended the lockdown in Chengdu, an industrial city in western China where many Apple products are made. Electronics manufacturers Foxconn and Compal, located in Sichuan region in China, are impacted by the restrictions. Tech hub Shenzhen too is under some restrictions and some recent media reports have said “dozens of cities” in China are under full or partial lockdown.

For the upcoming festive season in India – starting from Navratri later this month and extending till Diwali next month – automotive and electronics industries in the country expect minimal disruption in supplies this year, unlike the last two years when supplies failed to match demand.

Godrej Appliances business head Kamal Nandi said companies have planned their inventory way in advance to de-risk from restrictions in China and hence components for festive production are all in place.

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