Fearing disruption for Omicron, companies order additional supplies, Auto News, ET Auto
Concerned that the Omicron variant could impact the movement of goods and disrupt imports, electronics and auto makers have ordered supplies for an additional 1-2 months and asked suppliers to expedite delivery of materials. raw. Those who import finished products have increased their order volume.
Senior executives at the company said past experience has shown that countries like China, Taiwan, Vietnam and Hong Kong can suddenly seal ports, airports or factories upon detection of a new variant. of Covid. This is shaking up production and inventory management for companies, which have already struggled with a shortage of components, including semiconductor chips, for several months.
Jasbir Singh, CEO of Amber Enterprises, India’s largest air conditioner subcontractor, said his company had just placed orders for an additional month of components to mitigate the impact of any restrictions on cross-border trade. Amber makes air conditioners for 22 brands, but luckily for the company, its peak season is several months away.
Kamal Nandi, commercial director of Godrej Appliances, also said his company will increase the component holding period to two months instead of one. “Shipping rates could increase further and shortages can arise if the Omicron variant takes its toll. We don’t want to take any risks,” he said.
Earlier this week, the World Health Organization (WHO) warned that the Omicron variant of the coronavirus poses a high risk of infectious outbreaks worldwide and could have serious consequences in some areas. Several countries have sealed borders for international travel from African countries and deferred plans to allow scheduled international flights.
Several auto industry executives have said they are closely monitoring the situation to assess the impact of the Omicron variant on the supply chain. Shashank Srivastava, senior executive director (marketing and sales) at Maruti Suzuki, said that while the supply of semiconductors has improved, the situation is dynamic. “The supply situation seems to have improved. In December our production will be 80 to 85% of the planned production. But in the future it is difficult to say when things will normalize because the situation is extremely dynamic. “, did he declare.
A senior executive at another Delhi-based automaker said he was following all Covid-related protocols and monitoring government guidelines. âIn our factories, we ensure that all employees are doubly vaccinated to minimize the impact in the event of an epidemic in India,â he said.
Maruti Suzuki reached 84% of its production target in November, up from 60% in October and 40% in September. IDC India market analyst Research Director Navkendar Singh said that while the January-March quarter is a sluggish period for smartphone sales, the new Covid variant may impact the launch and plans of sale of new models.