Rare earth magnet supply crisis has no impact on production so far, says Skoda India

Skoda Auto India, the Czech automobile manufacturer under the Volkswagen Group, claims there is no disruption to its production operations due to the ongoing rare earth magnet crisis that has resulted in the Indian automobile industry hitting the panic button and lobbying the government seeking a resolution. The premium car manufacturer that currently sells models such as Kylaq, Kushaq, Slavia and Kodiaq in the Indian passenger vehicle market has claimed that it has enough stock of the crucial component.

Speaking to the media, Ashish Gupta, Brand Director of Skoda Auto India, has said that the auto company is facing no production disruption at present owing to the rare earth magnet crisis, and it has enough stock. However, he didn't reveal if the company suspects any production disruption in the near future.

His comment comes at a time when several stakeholders of the Indian auto industry are suspecting a major headwind for vehicle production, especially for the models and variants that come equipped with high-end technology-aided features. Also, majorly impacted will be the electric vehicles, for which the rare earth magnets come as a highly important component. Interestingly, Skoda currently sells no electric vehicles. However, the rare earth magnets are key components for manufacturing internal combustion engine (ICE) vehicles as well.

Over the last few weeks, automakers such as TVS Motor Company, Bajaj Auto, as well as the industry body Society of Indian Automobile Manufacturers (SIAM) have expressed their anxiety over the ongoing crisis, which started as China that controls over 90 per cent of the global rare earth magnet production has put a curb on the rare earth material exports earlier this year. The industry stakeholders believe the Indian auto industry is likely to see a major production disruption in July or August this year, if the crisis continues. The industry players have even expressed anxiety that some of the vehicle models and variants may see production shutdown.

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