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. The 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.