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First Chip Shortage and Now Rubber Deficit, Global Auto Makers Witness Production Disruption

Nissan Magnite Production. (Image: Arjit Garg/News18.com)

Nissan Magnite Production. (Image: Arjit Garg/News18.com)

Disrupted shipping lines are hampering the import of natural rubber, an important material utilized in important components under the hood as well as tyres of vehicles.

While automakers across the globe are already witnessing a stiff shortage of crucial parts owing to the Covid-19 caused shutdowns, a new deficit of rubber supplies now stares at the segment. Disrupted shipping lines are hampering the import of natural rubber, an important material utilized in important components under the hood as well as tyres of vehicles.

The materials required to manufacture seats including foam, plastic and metal parts are also running short on availability. The automobile segment contributes significantly to the global economy and is now on the verge of coming to a grinding halt owing to supply chain disruptions.

While the ongoing second wave of the Covid-19 virus is wreaking havoc on almost every industry segment, the automobile industry has taken the hardest hit since the outbreak last year. A number of plants have either halted or cut down production concluding in billions of dollars of revenue losses.

With the global supply chain taking a hit and countries like China resorting to stockpiling of components, the prices of rubber are ballooning. Automobile giants in the United States are also in a rush to procure components on a large scale before the supply chain further takes a toll.

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Renowned car manufacturers including Fiat, Ford Motors and Stellantis have informed that they are keeping a close watch on the rubber supply and haven't witnessed a significant impact on their production. Michelin, one of the biggest tyre manufacturers headquartered in France is leveraging air transport to mitigate port disruptions.

The ongoing rubber shortage will further hamper the production of vehicles and the supply chain volume is not expected to normalise anytime soon citing the current gigantic wave of the Coronavirus which has grappled many countries.

What's more worrying in this regard is that rubber trees require seven years of maturation period before they can be used for rubber extraction, dwindling the chances of a quick bounce-back of the supply according to Bloomberg.

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first published:April 19, 2021, 14:58 IST