New Delhi, Feb 19 (SocialNews.XYZ) Rating agency ICRA on Wednesday said that India's automotive industry is likely to be negatively impacted due to the recent outbreak of coronavirus (COVID-19) across China and neighbouring countries in South-East Asia.
"China accounts for 27 per cent of India's auto component imports valued at $4.8 billion. The impact is estimated to be higher for high value-add and customised components, while commoditised products could shift to alternative suppliers," ICRA said.
ICRA said that the disruption in the supply of certain critical components sourced from China will have a differential impact.
"Original Equipment Manufacturer (OEM's) sourcing components like electronic components, EGR modules, Fuel injection pumps, Turbo among other components will be affected most - in particular the impact will be more profound on commercial vehicle (CV), passenger vehicle (PV) and the two-wheeler (2W) segments," it said.
Besides the rating firm maintained a negative outlook on the CV segment due to surplus capacity in system, existing financing constraint. Commercial vehicle sales, often considered to be a proxy for industrial health of the country.
The outlook on the PV segment too is negative and demand recovery is expected to be gradual. The initial months post BS-VI transition in April 2020 will be muted, and subsequently recover thereafter on revival in consumer sentiment.
Source: IANS
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