India’s automobile industry is grappling with fresh supply chain concerns as China abruptly halted exports of crucial automotive chips. The situation follows the Dutch government’s move to take control of Chinese chipmaker Nexperia, prompting Beijing to tighten chip export controls, reports Mint.
Nexperia, a key player in the global electronics industry, commands around 10% of the world’s chip market and is a dominant supplier of up to 40% of the transistors and diodes used in automotive manufacturing. This sudden export halt has sent ripples across global auto manufacturing, with Indian carmakers among the hardest hit.
Top automakers like Maruti Suzuki and Hyundai Motor India have acknowledged the growing tension. Both companies confirmed that their supply chain teams are closely monitoring inventory levels and have initiated communication with vendors to mitigate potential production slowdowns. While no immediate plant shutdowns have been announced, the situation remains tense.
Bosch India, a major component supplier, has issued a more serious warning. The company indicated that if export restrictions persist, its Indian manufacturing operations might need to temporarily adjust production schedules to cope with dwindling semiconductor supplies.
The disruption is particularly alarming given the automotive sector’s heavy reliance on semiconductors for modern car electronics, including safety systems, engine control units, infotainment systems, and electric drivetrain components. The industry is still recovering from the global chip shortage experienced during the COVID-19 pandemic, making this fresh setback even more unsettling.
Industry analysts suggest that the crisis underscores the need for India to diversify its semiconductor supply base and accelerate domestic chip manufacturing efforts. Government initiatives like India’s Semicon Mission are aimed at addressing such vulnerabilities, but it may take several years for local capacity to catch up with demand.
As geopolitical tensions continue to impact technology supply chains, Indian auto manufacturers are bracing for challenges ahead and exploring contingency plans to ensure production continuity.
