Raw material shortage hits vehicle spare parts manufacturers

CHENNAI: Industrial units in the city manufacturing spare parts of two-wheelers say that they are struggling to get a steady supply of raw materials even as the vehicle sales have shot up following the lockdown relaxations. 

“The prices of raw materials have skyrocketed in the past two months. The main reason for this is the increase in exports. Indian companies are getting good business abroad and hence, they are exporting materials to foreign customers instead of Indian companies,” says M Balachandran, president of Ambattur Industrial Estate Manufacturers’ Association (AIEMA).

He says that the demand for both two-wheelers and four-wheelers has gone up since more people are shunning public transport due to Covid scare. Taking this as an opportunity, both vehicle manufactures and dealers have hiked the prices. “The price of steel material has increased by least 10 to 15 per cent. Since the industries were closed for a long period, a lot of export orders were pending. So now, they are selling more now,” he adds.Industrialists say another major issue they face is the closure of godowns. 

“Most raw materials for manufacturing two-wheelers are procured from Mumbai, Kolkata, Delhi and to some extent Hyderabad. Crippled due to cash shortage, many companies have not even begun functioning. So, they are not sending raw material here,” says KV Kanakambaram, president of Industrial Estate Manufacturers’ Association, Guindy. 

He further said when there is not enough raw material, the godowns remain closed. Also, India was exporting cheap raw material from China, but post-Covid, that too has been stopped.Also, shortage of manpower remains a major issue. Most of the migrant workers who went to North India have not returned. 

Industrialists are positive that those coming from nearby places like Thiruthani, Tiruvallur and Arakkonam will rejoin soon as special train services are set to begin.