Autobayng News Team
China’s new export curbs, extending now also to components containing rare earth magnets, is likely to worsen the operational crisis at Indian companies across automotive, consumer electronics, and industrial machinery industries. The measures by Beijing come at a time when these companies were just starting to benefit from a sharp revival in demand thanks to GST cuts. Senior auto industry executives ET spoke to said they will affect imports of components, sub-assemblies and certain types of light rare earth magnets, currently being used by Indian manufacturers as a stopgap measure to tide over the prevailing curbs on exports of heavy rare earth magnets by the northern neighbour.”The scope of the restrictions which has now been announced is so vast and so consequential that it will impact every sector, be it aerospace, defence, automobiles, consumer electronics or industrial machinery,” said a senior industry executive, asking not to be named.The lighter rare earths are currently being used by Indian manufacturers as a stopgap measure to tide over prevailing curbs on exports of heavy rare earth magnets by Beijing.
“The scope of the restrictions which have now been announced is so vast and so consequential that it will impact every sector, be it aerospace, defence, automobiles, consumer electronics or industrial machinery,” said a senior industry executive, asking not to be named. “It will hit all manufacturers who were or have started importing traction motors, rotary assemblies, electronic parts and components for battery systems from China after the stoppage in supplies of heavy rare earth magnets to India.”
Rare earth magnets are used in about a dozen critical components that go into electric vehicle motors, as well as vehicle speed detection and automatic gear shifting systems.
According to the latest guidelines announced by China’s Ministry of Commerce, any component containing rare earth magnet exceeding 0.1% of the total value will henceforth require export approval from local authorities with effect from November 8.
“Every company will be affected,” said a second industry executive, pointing out that “the notification does give some time to make arrangements to safeguard operations in the short term.”“But the problem is even if I develop alternate sources, it does not necessarily imply I will not be impacted. The restrictions are wide-ranging, covering everything from raw materials to equipment to technologies and components. There are thousands of parts required in automotive manufacturing and if some other company in the value chain gets hit, if even one part is not available, what will I do with the products I make?”
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