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Tata Motors raises concerns over supply chain issue due to China lockdown

Major apprehensions by Tata Motors that the ongoing global semiconductor shortage will impact it

Tata Motors raises concerns over supply chain - supply chain tribe by celerity

In his letter to shareholders, N. Chandrasekaran, chairman of Tata Motors, said that the global shortage of semiconductors had a disproportionately adverse impact on Jaguar Land Rover’s production and sales during 2021-22 compared with its competitors.

While elaborating on the risk factors in a filing with the US Securities and Exchange Commission, the company said that if it is unable to ensure a supply of critical parts from China for production, they may be forced to stop production in some or all of their plants, with significantly negative impact on cash flow in the future.

It added that the supply chain disruptions, if not managed, could have an adverse effect on production volume, revenue and profitability, customer satisfaction and reputation.

"As the transition to electrified vehicles continues the skills, processes and technologies required to ensure continuity of supply will change, so securing these supply chains is business critical. Raw materials comprise almost 65 per cent of our total costs. If we are unable to find substitutes for such raw materials or pass price increases on to customers by raising prices, or to safeguard the supply of scarce raw materials, our vehicle production, business and results from operations could be materially affected’’, it said in the risk factors.