There is no immediate solution to tariff, rare-earth magnet crises: ACMA president

The auto components industry has no quick fixes for the twin challenges facing the sector – retaliatory tariffs and China’s restrictions on rare-earth magnet supplies – Shradha Suri Marwah , president, the Automotive Components Manufacturers Association (ACMA) said on Friday.

“Tariffs have impacted us. We are hopeful that something will come out of it. We have had issues with rare-earth magnets. We don’t have clarity on that yet. We have a long-term solution to it, but we don’t have an immediate solution to it,” said Marwah, who also serves as MD and CEO of Subros, at ACMA’s 65^th Annual Session in New Delhi.

According to Marwah, the industry is finding ways of how supplies can continue, by doing more value engineering on it and working with the OEMs. “With the GST getting rationalised, we are seeing a huge upswing in demand, just as the festive season hits us, starting September 22,” she said. Marwah said that the dealers have given her feedback that the bookings are robust even at the cusp of the festive season.

“The domestic market seems to be doing alright. I think we will come out of it. That’s what we need to look at,” she said. The farm sector, according to her, is doing well, with the GST reduced to 5%. “We have to look at areas of opportunity.”

Speaking on the tariffs, Vinnie Mehta, Director General, ACMA, highlighted that the Indian automotive component industry exported $6.6 billion worth of components to the U.S. “The $3.5 billion worth of exports come under Section 232, which covers cars and small trucks. That’s at 25% tariffs. The other components, worth $3 billion, for commercial, off-road vehicles, tractors, and construction equipment, are at 50% now.”

Vikrampati Singhania, President Designate, ACMA; and MD, JK Fenner, stated that there is a substantial, alternative market for the export of automotive components to the industry. “The industry has been building out on markets, customers, and so forth. In the long run, I think this is a transitional phase, and both our countries have a great relationship, and this is the beginning of lots of conversations to reach where we desire to be,” he explained.