Japanese manufacturing of Suzuki Swift vehicles temporarily halted due to China's limitations on the export of rare earth elements crucial for vehicle production.

In a significant turn of events, the Indian automotive sector is bracing itself for the impact of China's decision to suspend the export of rare earths and related magnets. This decision, made in April, has caused a disruption in the global supply chain, with far-reaching consequences for the industry.

Bajaj Auto, one of India's leading automotive companies, is expected to face the brunt of this decision. Rakesh Sharma, the Executive Director of Bajaj Auto, has disclosed that the company will soon be affected by China's rare earth export decision. If shipments don't arrive soon, July manufacturing for Bajaj Auto will face serious problems.

The potential impact is not limited to Bajaj Auto, but may affect the entire Indian auto industry. The entire industry relies exclusively on Chinese suppliers for specialized magnets, giving China great leverage to exert its soft power.

Suzuki Motor, another major player in the Indian auto industry, has halted production of its compact car, the Swift, due to parts shortages caused by Beijing's restriction on rare earth exports. Production of both mild-hybrid and non-hybrid Swifts has been halted from May 26 to June 6. Full production of the Swift is expected to resume after June 16.

Partial manufacturing of these models at Suzuki Motor's Sagara plant will commence from June 13. This marks the first instance where an automotive company has had to suspend its production due to rare earth shortages.

India does have deposits for these resources, but extraction and setting up facilities will take time. A delegation from automotive industry associations in India is scheduled to visit China next week to discuss fast-tracking approvals for export licenses for rare-earth mineral exports. However, the names of the individuals in the Indian delegation traveling to China to expedite export licenses for rare-earth mineral exports are not mentioned in the available sources.

The European Association of Automotive Suppliers has reported that only 25 per cent of export license applications made by auto components suppliers have been approved since April. This underscores the vulnerability of the entire auto industry to Chinese forces and the need for India to diversify its supply chain.

The rare earth shortage disruption serves as a stark reminder of the importance of self-sufficiency and the need to reduce dependence on any single country for critical resources. It is a call to action for the Indian auto industry to explore domestic sources and alternative suppliers, and to invest in the infrastructure needed to extract and process these resources domestically.

Japanese manufacturing of Suzuki Swift vehicles temporarily halted due to China's limitations on the export of rare earth elements crucial for vehicle production.