Maruti Suzuki sees no immediate impact of rare-earth magnet curbs by China

Maruti Suzuki , India’s largest carmaker, does not see any immediate impact of curbs on rare-earth magnets by China, Rahul Bharti, senior executive officer, corporate affairs, said at a press conference on Monday. “If there is any material impact, we will let the stakeholders know,” he told reporters.

“It is not a restriction. China has asked for an end-user certificate, established by the industry and endorsed by the government. This certificate then needs to be approved by the Chinese government,” said Bharti. When asked about the runaway the carmaker has before the curbs impact it, Bharti said that Maruti Suzuki has “submitted an important application," and said it will be difficult to “say anything in the matter until it receives a response.” 

However, in a closed-door meeting with the Ministry of Heavy Industries, Maruti Suzuki flagged that it would have to stop the production of one of its car models in early June if the issue is not resolved soon, according to Reuters. According to an unreleased document by the Society of Indian Automobile Manufacturers (SIAM)—which was reported by the media—the production could stop by the end of May in the absence of a recourse. 

Any disruption to the rare-earth magnets supply will affect the electric vehicle makers the most. “For some of these EV component makers, the entire supply chain is based out of China,” Rajiv Bajaj, managing director, Bajaj Auto, said in an interview with Moneycontrol. “If it is not checked, then, in a matter of weeks, the entire Indian EV industry will come to a grinding halt as China has put export controls on rare-earth magnets to India.”

For Maruti Suzuki, however, the timeline of its launch of the e-Vitara, its first battery electric vehicle, remains unchanged, and there is no “material impact”, according to Bharti. Apart from being a crucial component in electric vehicle motors, the rare-earth metals are used in the manufacturing of power windows and speakers installed in cars. 

HD Kumarswamy, the union minister of heavy industries, said at a separate press conference on Monday that it is preparing to send a delegation of industry executives to China in the next two to three weeks to take the issue up with the authorities. Bharti concurred. While not delving into the specifics of the discussions with the government, he said that the government has been “receptive and supportive” of the concerns. 

When asked about a potential long-term solution for the curbs, Bharti said, “That's a larger question that will need more deliberation and more studies. Where are other sources available?”. He added that this is not the first time that the industry has faced the curveball of supply-chain constraints. “There was the semiconductor crisis, the container crisis, so a disruption is not new.”