As China continues to face rising cases of the Covid-19 virus, the Indian Economy is also getting affected. The durable consumer makers are stocking up on raw materials to deal with any global supply concerns from China. Usually, factories maintain an inventory to keep stock up for a month. But looking at the situation now, they are keeping stock up for at least two to three months.
The Chinese New Year’s Holiday starts in 3rd week of January and importers are worried that if the Covid cases continue to rise, the factories in China are not able to resume full production in Feb. and the Indian Industry once again face a supply chain disruption issue. Any possible disruption may impact the production of electronic products like Air conditioners (A.C) and LED TV Panels, as a high proportion of these components are imported from China.
If the Covid cases continue to rise, the factories in China are not able to resume full production in Feb. and the Indian Industry once again face a supply chain disruption issue
Dixon Technologies vice chairman and MD Atul Lall said “Till now the supply chain from China is fine and not impacted. The suppliers are ensuring about delivering on time but we’re keeping our fingers crossed.” On the Chinese New Year Holiday, he said, that’s fine. They are concerned about the Pandemic (Covid-19). Dixon Technologies is the leading Indian electronic manufacturing firm. Which is based in Noida. Another source said that the appliances industry is working on reducing its dependency on China for the component’s source.
Executive Vice President of Godrej Appliances, Kamal Nandi said “over the past years, the appliances industry has reduced its dependency on China for import components. But there are still some categories of appliances like A.C., where the dependence on importing components from China is still very high. Close to forty to forty-five per cent of the components of an A.C. comes from China”. He added if the situation of Covid-19 in China worsens after the Chinese New Year Holidays then, it would be a matter of concern. If the supplies of the components are disrupted, then the impact will be felt from April this year when A.C. sales start picking up.
Factories maintain an inventory to keep stock up for a month. But looking at the situation now, they are keeping stock up for at least two to three months
According to CEAMA (Consumer Electronics and Appliances Manufacturers Association), things are in a ‘flux’ state and everyone is chasing suppliers for getting components delivered on time. From 20 January, the Chinese New Year will start and then the supply will resume from the 1st week of Feb. From compressor to motors, the industry is still dependent on China, CEAMA President said.
