Tata Motors-owned Jaguar Land Rover has flown in auto parts in suitcases as the effects of coronavirus take a toll on the luxury carmaker's supply chains in coronavirus-hit China. The company on Tuesday warned that its production schedules in the UK, as well as India, are under strain due to its supply chains in China, known as 'the world's factory'. The virus has killed over 2,000 people in China sparking a shutdown that has seen factories close across the country. JLR CEO Ralf Speth said the company has enough supplies to ensure production for the next two weeks, but from the third week onwards it remains risky and could even mean plant closures.
"We have flown parts in suitcases just to make sure we have all the parts but for the third week, we still have parts missing," said Speth. JLR is the UK's biggest carmaker with three factories across the country that produce nearly 400,000 vehicles a year. Tata Motors CEO and Managing Director Guenter Butschek, in the UK for the official launch of the company's new National Automotive Innovation Centre (NAIC) at the University of Warwick in Coventry, said the same scenario was playing out in the Tata Group firm's Indian base. In India they have been "tracking and tracing" the situation on a very microscopic level to modify production strategy as things develop, Butschek said. "Everything mentioned by Ralf is not just an issue for Jaguar Land Rover. Although we have all of our operations domestically located in India, we are pretty much in the same boat," said Butschek."
In particular, the automotive industry is largely dependent on its global supply network. We are all in some way dependent on our suppliers out of China. We are following the situation on a daily basis to see how it is developing," he said. Referring to the timing of the crisis as the company works towards implementing the Indian government's Bharat Stage (BS) VI regulations for cleaner vehicle emissions, the senior Tata Group executive admitted that the supply crisis has come at a "critical" period for the company.
"As it looks, we are safe for the month of February and for a good part of March... we are at a critical transition stage to BS-VI and at the same time we are doing mid-cycle enhancements of products, this puts us in a very critical light because we are in the ramp-up stage of all our products," he said. Tata Motors said the complexity of its supply chains means that even though parts may be available, the big challenge is getting them out of the region of Wuhan - the epicentre of the virus, which remains inaccessible.
As China combats COVID-19 or the coronavirus strain, factory shutdowns and movement restrictions in the country's auto manufacturing hubs are having widespread knock-on effects on the industry. JLR said that as a result of no operational dealerships in the region, the company's sales in China have also taken a major hit in recent weeks.