India's automakers and parts suppliers are bracing for production slowdowns and assembly-line disruptions as the Iran war chokes gas supply, threatening growth in the world's third-largest car market.
Some parts suppliers to India's leading carmakers like Maruti Suzuki India Ltd., Tata Motors Group and Mahindra & Mahindra Ltd. are reporting a gas shortage to power operations—an early sign that supply chain issues are cropping, according to two dozen executives at car companies, part makers and dealers.
The disruption comes at a time when India's car demand is soaring to record levels, with sales expected to cross 4.5 million units in the current fiscal to 31 March 31, leaving little excess inventory with manufacturers and dealers.
India relies heavily on the Middle East for energy supplies, importing 50% of its natural gas needs mostly from Qatar, which has been forced to shut its refinery after a wave of Iranian attacks.
Shipments of oil and gas through the Strait of Hormuz have also tanked after Iranian attacks on vessels.
While India is working to secure gas from the US, Norway and Russia, the govt has prioritised supplies for homes over factories.
Small and medium manufacturing units, which form the car industry's backbone, are most vulnerable, as they rely more on gas and are unable to switch to other sources quickly.
Automakers are operating in a state of high-alert diplomacy with their suppliers to keep assembly lines moving, and have not officially cut production schedules yet.
