Shortage of BS-IV Parts Hits Truck Production
The scarcity had led to a production cut of almost 50% at Tata Motors, the country’s largest truck maker, and affected 20% to 40% of output at other manufacturers in April, according to people familiar with the matter.
Bosch, the sole supplier of fuel injection system for BS-IV diesel commercial vehicles, is facing shortfall in supply of the component. Sales of medium and heavy trucks in India may remain subdued this quarter because German auto component maker Bosch faces a shortage in the supply of fuel injection systems needed to meet stricter emission norms in force in the country from this financial year.
The scarcity had led to a production cut of almost 50% at Tata Motors, the country’s largest truck maker, and affected 20% to 40% of output at other manufacturers in April, according to people familiar with the matter. Bosch India said the shortage is 20% at present and normal supplies are likely to be restored by June.
Many manufacturers were left with unsold inventories of vehicles conforming to Bharat. Bosch, the sole supplier of fuel injection systems for BS IV diesel commercial vehicles, had not anticipated that the sale of BS III vehicles would be stopped from April 1, Jan-Oliver Roehrl, additional director at Bosch, told ET. Meeting the higher demand for BS IV systems will be a challenge, he said.
“At Bosch, we rely heavily on our international production network, which is spread across several locations across the globe. With most of the components and subcomponents being sourced from other markets, there was a lag in meeting the Indian market’s peak demand immediately,“ said Roehrl.
However, any lag or hiccup at Bosch’s end affects production at truck makers. Bosch said its production network is ramping up capacity to meet increased demand.The current shortage will affect production volumes at Indian truck makers in the first quarter of FY18.
“At Bosch India, we are trying to settle this issue to a great extent by June,“ Roehrl said.
While the first half of the financial year may remain subdued, the market may still grow by 10-15% in FY18, Ravindra Pisharody, ED for commercial vehicles at Tata Motors, told ET.
Bosch India is localising production and since the same family of components will be used for emission standards up to BS VI norms, a similar shortage is unlikely to be repeated, Bosch said.
Bosch manufactures pumps and elements, among other components, for diesel power trains at its plant in Bidadi near Bengaluru. The company made capital investments of about `630 crore in 2016-17.
Bosch started development of the second phase at Bidadi on May 22, which will primarily manufacture new generation and conventional fuel injection products. It is expected to be completed by mid of 2019, in time to meet BS VI norms.