No impact of rare earth magnet shortage on production so far: Maruti Suzuki Chairman

While the Indian auto industry is reeling under pressure and hitting the panic button, stating that the rare earth magnet shortage will hit the sector hard with production disruption, Maruti Suzuki, the number one passenger vehicle manufacturer in the country, says there is no impact of the supply chain issue on vehicle production so far. Maruti Suzuki India Chairman R C Bhargava on Monday said there is no impact on the company's production due to the shortage of rare earth magnets as of now.

When asked if the auto major is facing any production issues due to the global shortage of the rare earth magnets, which are important for vehicle manufacturing, Bhargava said there is no impact at the moment, reported PTI. He reportedly also said that the production activity at the country's largest carmaker is going on as planned.

Maruti Suzuki Chairman's comments come against the backdrop of restrictions imposed by the Chinese government since April 4 this year on the export of rare earth elements and related magnets. China has mandated special export licences for seven rare earth elements and related magnets. China controls more than 90 per cent of global processing capacity for the magnets, which are used across sectors including automobiles, home appliances and clean energy.

Rare earth magnet crisis: What lies ahead?

When asked if the company sees a production crunch over the next few months due to the issue, Bhargava noted that, "If the licenses come through and they are supposed to come through, there would not be a problem."

Meanwhile, the Indian automobile industry has sought government support in expediting approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars.

As per the industry sources, various domestic suppliers have already sought approval from the Chinese government through their local vendors in China. However, no approvals have been granted so far, which has raised anxiety in the industry. Many companies are facing the heat due to the shortage of critical raw materials used across multiple sectors, including the automobile industry.

The critical materials include samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.

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