Steel shortage from Posco may force automakers to suspend production: SIAM

Topics Siam | Posco | Automakers

Auto industry body SIAM on Monday said supply shortage of steel from Posco's Maharashtra-based plant could lead to suspension of production at various facilities of leading companies.

Raigad-based manufacturing plant of South Korean steel major Posco is one of the major suppliers of steel in the industry. It is currently facing labour issues that have resulted in the disruption of supply to some of the leading automakers in the country.

"Disruptions in supplies from Posco Maharashtra Steel has resulted in non-availability of steel for some of the major Auto OEMs," Society of Indian Automobile Manufacturers (SIAM) Director General Rajesh Menon said in a statement.

As per industry sources, auto companies such as Maruti Suzuki, Hyundai Motor, Kia Motors, Tata Motors and Mahindra & Mahindra source steel from the Posco plant.

There have been no despatches of steel since March 4 except for one day, wherein some trucks loaded with steel and held up outside the factory premises were allowed to leave for their destinations, Menon said.

"At least one auto manufacturer's production has already got impacted and if the situation does not improve, it is understood that more OEMs will be constrained to suspend manufacturing in some of their lines, very soon," he added.

The domestic auto industry is already facing a shortage of semiconductors leading to production hassles. The shortage has led to an increase in waiting periods for various models which are in demand.

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cellphones to various other electronic items.

The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as Bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.

Industry experts feel that enhanced demand for automobiles in the last few months has put pressure on the global supply chains leading to shortages.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel