China Rare Earth Curbs Disrupt Supply As Suzuki Swift Production Halted

China accounts for the majority of the world's rare earth production while being essential to electric and hybrid cars especially along with other uses

With exports of rare earths from China being halted, the supply chain for various industries including auto is affected since it is a critical component

Source : Somnath Chatterjee

China in April had suspended exports of key rare earth magnets and elements which has started to affect various industries since these are vital components in a number of industries including cars. Hence, the export ban has affected Japanese carmaker Suzuki which has stopped Swift production in Japan excluding the Swift Sport hatchback. Production for the Swift has been on hld from May 26th with shortage of critical components being one of the main reasons.

 

With exports of rare earths from China being halted, the supply chain for various industries including auto is affected since it is a critical component. Not just Suzuki as some European auto parts plants have also reportedly stopped production. Plus in the future we can expect more such disruptions to follow as more automakers could also stop making models due to supply chain disruptions. China accounts for the majority of the world's rare earth production while being essential to electric and hybrid cars especially along with other uses.

 

 

Some other carmakers are currently scrambling to fix the potential supply chain issues while in India, with the export restrictions, the ramifications will also be felt with many vehicle factories being affected. With rare earths playing a critical part of many of the cars components including nearly everything like a touchscreen to various sensors, the resuming of imports will be crucial for various industries to function smoothly. Going forward India could also look at increasing domestic production of rare earths and reduce the dependency on imports while potentially fiscal incentives could also be in the pipeline to boost production.