India's Maruti says no immediate impact from China rare earth magnet curbs

New Delhi: Maruti Suzuki, India's top-selling carmaker, said on Monday there was no immediate production impact from China's export curbs on rare earth magnets, a key component, and that it was in talks with the government on the matter.

Auto industry manufacturers told government officials last week that production could stall within days due to the curbs, Reuters reported.

These companies were worried by the complexity of a new import process requiring approval from Indian and Chinese officials as well as documents such as end-use certificates stating the magnets are not for military purposes.

When asked how many weeks of inventory Maruti has before production would be impacted, the automaker said it has submitted an import application and it would be difficult to give "very specific details" until it receives a response.

"It is not a restriction. It is an endorsement of end use. In case there is an issue, we will ... inform all our stakeholders, including the stock exchange," Rahul Bharti, senior executive director, corporate affairs, told reporters.

However, at an industry meeting with India's heavy industries ministry last week, Maruti said it might be forced to stop production of one of its car models in early June if the magnet issue is not resolved soon, two sources with direct knowledge of the matter told Reuters.

China controls over 90 per cent of global processing capacity for the magnets, used in fields as varied as automobiles, home appliances and clean energy. It enacted measures in April requiring companies to obtain import permits.

The Society of Indian Automobile Manufacturers has told Modi's officials that inventories at parts makers may run out by the end of May, and starting early in June, auto industry production is expected to come to a "grinding halt."

India's heavy industries minister, HD Kumaraswamy, told reporters separately on Monday that the government was preparing to send a delegation of industry executives to China in 2-3 weeks to discuss the issue with authorities there.

The concerns come as carmakers are gearing up to launch new EVs in the country as they grapple with slowing sales of gasoline models.

Maruti, which plans to launch its first EV in India this year - an electric SUV called the e Vitara - does not see any "material impact" on the car's launch timeline because of the magnet issue, Bharti said.