Maruti Suzuki stated on Monday that there is no immediate disruption to its production due to China’s recent export restrictions on rare earth magnets, which are critical components in automobiles. The company is currently in discussions with the Indian government regarding the issue.
This comes after other auto manufacturers warned officials last week that vehicle production could halt within days if the situation isn’t resolved. The main concern revolves around a new, complex import process requiring dual approvals from Indian and Chinese authorities, along with specific documentation such as end-use certificates affirming that the magnets won’t be used for military purposes.
While Maruti has submitted its import application, it said it’s too early to provide specific details on how long its current inventory will last. “It is not a restriction. It is an endorsement of end use,” said Rahul Bharti, senior executive director of corporate affairs, during the company’s monthly sales call.
Risk of Production Halts Looms Over Industry
China currently accounts for over 90% of global magnet processing capacity and introduced new export requirements in April mandating import permits.
The Society of Indian Automobile Manufacturers (SIAM) has informed government officials that parts manufacturers could run out of magnet inventory by the end of May, potentially causing a “grinding halt” to production starting early June. In response, India’s heavy industries minister, HD Kumaraswamy, said a delegation of industry leaders would be sent to China within the next 2–3 weeks to address the matter.
Meanwhile, automakers are preparing to roll out new electric vehicles in India amid slowing combustion powered vehicle sales. Maruti, which plans to launch its first EV — the electric SUV e-Vitara — later this year, stated that the magnet supply issue will not have a “material impact” on the vehicle’s launch timeline.
According to customs data, China’s exports of permanent magnets dropped 51% year over year in April — the first month reflecting the impact of the new measures — totaling 2,626 tons. Meanwhile, India’s auto industry, which imported 460 tons of rare earth magnets (primarily from China) in the fiscal year ending March 31, is projected to import 700 tons worth $30 million this year, industry estimates show.
