Lithium dependency on China to continue in short term: SEG Automotive India

India and many other countries depend on China for rare earth metals and most importantly Lithium.

By:May 21, 2020 6:20 PM

SEG Automotive India has resumed their operations. The components manufacturer who has made it big in the electric field is backed by Zhengzhou Coal Mining Machinery Group Co. Needless to say, after the pandemic, questions about the China connection and the dependency are bound to surface. We got these and questions about future products answered from Anil Kumar, MD of SEG Automotive India.

ED:  Has 100 percent production started? What’s the current capacity and till when will normalcy be attained?

AK: The current unprecedented situation has affected every sphere of economic activities globally; automotive industry is not an exception. At present, the global automotive industry is expected to see a downfall of at least 22% from 2019 to 68 Mio vehicles and can reduce further based on the extent of the impact of the virus spread .

In India, the automotive industry was already affected in 2019 on the backdrop of poor economic activities, and is further affected in 2020 due to lockdown, which was mandatory to control the spread of virus. The industry, which is currently fighting to overcome the challenge of implementing the new legislation, BS6 in record time, is estimated to witness a downfall of light vehicle sales in 2020 anywhere from 25 to 35% over 2019. And the commercial vehicles are estimated to be impacted even higher.

Beginning May 2020, the industry has resumed operations in phased manner with approx. one third of the capacity, incorporating new social distancing norms. Currently the supply chain bottlenecks are being addressed, as some industries in the supply chain are from affected zones and yet to resume the operation.

The recovery in the automotive sector will be based on demand generation, which depends on two factors, 1) Controlling the spread of virus, 2) Positive influence of the govt. policies. In the near term, the government should look at reducing the GST on automobiles, auto components and expedite implementation of vehicle scrappage policy to revive the demand in automotive industry. At present, we expect the recovery to happen during the last quarter of the current year.

ED: Why exactly do most of the manufacturers depend on China for raw materials or components?

AK: The pandemic situation has created many new learnings to the industry, important among them is to have a strong local supply base and avoid complex supply chains. The situation also provides the Indian industry an opportunity for portfolio upgrades, and stay relevant against the globally established supply chain by continuously improving the competitiveness on technology and cost, supporting the “Make in India” initiative. However, our dependency on the imports of raw materials like rare earth, lithium. etc will continue in the short-medium term.

ED: Any new SEG inventions which will be launched this year and used by an OEM in a car here?

AK: SEG Automotive is actively shaping the automobile industry’s journey from the combustion engine to electrification by delivering efficient solutions for CO2 reduction – regardless of the powertrain technology. We continuously evaluate the product gaps and manage our portfolio by investing in new technology for the future. One such technology recently has been the highly efficient electric mobility solutions towards the electrification of two-wheelers and three-wheelers. We have already started on this journey and would bring in new technologies for further CO2 reduction in ICE vehicles while upgrading the electrification portfolio.

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