India's Maruti Suzuki cuts near-term EV production amid rare earths crisis
India's top carmaker, which said on Monday it had not seen any impact yet from the supply crisis, now plans to make about 8,200 e-Vitaras between April and September, versus an original goal of 26,500, according to a company document seen by Reuters.
It cited 'supply constraints' in rare earth materials that are vital in making magnets and other components across a range of hi-tech industries.
Maruti still plans to meet its output target of 67,000 EVs for the year ending March 2026 by ramping up production in subsequent months, the document said.
China's curbs on some rare earth exports have rocked the global auto industry, with companies warning of severe supply chain disruptions. While some companies in the United States, Europe and Japan are seeing supplies easing as they secure licences from Beijing, India is still waiting for China's approval amid fears of production stoppages.
India's Maruti says no immediate impact from China rare earth magnet curbs
Launched amid much fanfare at India's car show in January, the e-Vitara is crucial to Maruti's EV push in the country, marking its entry in a segment that Prime Minister Narendra Modi's government wants to grow to 30% of all car sales by 2030 from about 2.5% last year.
The setback could also hurt parent Suzuki Motor, for which India is the biggest market by revenue and a global production hub for EVs. The bulk of the made-in-India e-Vitaras are earmarked for export by Suzuki to its major markets like Europe and Japan around summer 2025.
Maruti told reporters last week the rare earths issue had no 'material impact' on the e-Vitara's launch timeline. Chair RC Bhargava said there was 'no impact at the moment' on production, local media reported on Monday.
Maruti and Suzuki did not respond to requests for comment on Tuesday.
Maruti shares trading on the Indian stock exchange fell as much as 1.4% to the day's low after the news.
Maruti is yet to open bookings for the e-Vitara with some analysts warning it is already late to launch EVs in the world's third-largest car market where Tesla is also expected to begin sales this year.
Under its previous plan 'A', Maruti was to produce 26,512 e-Vitaras between April and September - the first half of the fiscal year. Under the revised plan 'B', it will manufacture 8,221, the document showed, indicating a two-thirds cut in its production schedule.
However, in the second half of the financial year – between October and March 2026 - Maruti plans to ramp up production to 58,728 e-Vitaras, or about 440 per day at its peak, versus a previous target of 40,437 for those six months under plan A.
Two supply chain sources confirmed Maruti's plan to scale back e-Vitara production because of rare earth magnet shortages but were not privy to the exact numbers.
The rare earths crisis comes as Maruti is already grappling to recover market share lost to Tata Motors and Mahindra & Mahindra's feature-rich SUVs. These companies also lead India's EV sales. Maruti's share of India's passenger vehicle market is down to 41% from a recent peak of about 51% in March 2020.
Suzuki has trimmed its sales target for India to 2.5 million vehicles by March 2031 from 3 million previously, and scaled back its lineup of EV launches to just four, instead of the six planned before, as competition in the South Asian nation intensifies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 hours ago
- Business Recorder
PIDE holds seminar: Country's macro-economic indicators show signs of improvement
ISLAMABAD: Economists at a seminar while highlighting key economic challenges of Pakistan have said that the country's macroeconomic indicators have shown signs of improvement, such as declining inflation which is below five percent and a recent upgradation of credit rating by S&P from CCC+ to B-. Speaking at an event organised by Pakistan Institute of Development Economics (PIDE) here on Friday, they, however, emphasised the need to transition from mere stabilisation to robust growth to benefit the common people. The event brought together senior officials from the Ministry of Planning, Development and Special Initiatives, researchers, and economists to engage in a rigorous policy discussion. Speaking on the occasion, Dr Haider Ali explained that the seminar aimed to deliberate on aligning short-term macroeconomic stabilisation efforts with long-term sustainable growth strategies under the URAAN Pakistan framework. URAAN Pakistan is a strategic initiative by the Planning Commission built on the '5Es': Exports, E-Pakistan (digitalization), Environment, Energy, and Equity. Dr Khurram Ejaz presented a comprehensive overview of the current economic context and proposed strategies to move towards a stable growth path under URAAN Pakistan. He noted that Pakistan's economy has faced a multitude of external and internal shocks, including post-pandemic disruptions, the Russia-Ukraine conflict, and the devastating 2022 floods. These factors pushed the country toward fiscal and balance-of-payment crises, culminating in the signing of an Extended Fund Facility (EFF) with the IMF in September 2024. The IMF programme emphasised restoring macroeconomic stability through fiscal tightening, monetary policy, and external sector stabilisation. While it succeeded in curbing inflation and modestly reviving growth estimated at 2.7 percent, it limited the fiscal space for development spending capped at 2.6 percent of GDP. Dr Ejaz contrasted this with the ambitious targets of URAAN Pakistan, which envisions 6 percent GDP growth by 2029 with significantly higher employment generation. He acknowledged a critical financing gap between what is possible under the IMF framework and what URAAN Pakistan aspires to achieve. He proposed following five initial strategies to bridge this gap: (i) repositioning Development Finance Institutions (DFIs) to fulfill their core mandate rather than investing in low-risk securities; (ii) migrating suitable PSDP projects to Public-Private Partnership (PPP) mode to crowd in private capital; (iii) issuing diaspora, green, and SDG-linked bonds to unlock innovative financing; (iv) devolving social sector expenditures to provinces in a phased manner, and (v) reducing losses from state-owned enterprises (SOEs) and monetising non-strategic public assets such as ports under a structured asset recycling programme. Dr Nasir Iqbal questioned the underlying assumption that low growth is due to limited PSDP spending and argued that productivity, export orientation, and youth engagement are more critical to sustained growth than merely increasing public investment. He recommended establishing village-level economic zones, leveraging idle public infrastructure, and simplifying business registration to boost local entrepreneurship. Dr Karim Khan emphasized that IMF programmes and growth are not inherently contradictory and that sustainable growth must be private sector-led. He urged leveraging CPEC Phase-II and capitalising on productive investment avenues. Dr Shujaat Farooq added that governance reform and performance-based budgeting are crucial. He highlighted a disconnect between planning and finance ministries and stressed the need to engage provinces, whose PSDPs now exceed the federal government's in size. Dr Muhammad Zeshan noted the inefficiencies within PSDP allocations and tariff structures that perpetuate rent-seeking and protect low-productivity sectors. He advocated enabling emerging industries such as halal meat exports, seafood, and IT, and preparing for the Fourth Industrial Revolution through digitization, cloud infrastructure, and robotics. Shaaf Najib questioned the long-term impact of PSDP spending, citing studies that showed limited sustainability. He called for improving PSDP efficiency, prioritizing completed projects, and redirecting funds toward sectors with higher fiscal multipliers. Dr Mehmood Khalid appreciated the absence of tax rhetoric in the presentation but criticised the lack of growth diagnostics and the absence of evidence from existing research. He emphasised grounding all strategies within the URAAN Pakistan 5Es and aligning projections with realistic economic modeling. Dr Iftikhar echoed these sentiments, warning against public investment that crowds out private sector liquidity and highlighting inconsistencies in SEZ policies, HEC funding, and NFC allocations. Copyright Business Recorder, 2025
Express Tribune
5 hours ago
- Express Tribune
A fond farewell: Honoring the people, partnerships, and flavours of Punjab
As my two-year term as US Consul General in Lahore comes to a close, my colleagues and friends are often asking me: "What will you miss most about Pakistan?" The answer is simple: the people and the food! I've been fortunate to travel and work all across Punjab Province — from Attock to Rahim Yar Khan — spending quality time in more than 20 districts. Everywhere I've gone, I've been greeted by such warm Pakistani hospitality, and I've had the opportunity to meet so many inspiring individuals who are working to build stronger ties between the United States and Pakistan, which benefit both of our countries' prosperity and security. For example, I've seen how US businesses across Punjab Province are creating high-quality jobs for thousands of Pakistani men and women, while also driving local innovation in sectors ranging from agriculture to IT. I've heard from Pakistani businesspeople about how they are turninghigh-quality US cotton imports into beautifulPakistani textiles — strengthening both the American and Pakistani economies. I've met hundreds of students who are working hard in US-supported English-language programs, recognizing that stronger English language skills will open doors to new economic possibilities for themselves and their communities. One of the major highlights of my time as Consul General was preparing for the December 2024 opening of the new US-supported "Lincoln Corner" at the historic Quaid-e-Azam Library in Lahore — as well as engaging with Pakistani students at other Lincoln Corners spread across the province. These locations offer opportunities for Pakistanis to check out the latest U.S. technology, explore study-abroad opportunities in the United States' world-class universities, and to help Americans and Pakistanis connect with one another. If you haven't attended a program at your nearby Lincoln Corner yet, I highly encourage it! In Lahore, I also always have appreciated the opportunity to drop by the iconic Lahore Fort to see the latest progress on our ongoing cultural preservation project to restore seven of the Fort's structures for future generations to enjoy. Of course, I've loved sampling unique local dishes all across Punjab Province, from chirayin Gujranwala, to payye in Lahore, to sohan halwa in Multan. And I'll especially miss Pakistan's fruits — including, of course, the kinnow, which is a sweet reminder and symbol of the longstanding US-Pakistan collaboration in agriculture. While I'm sad to depart Pakistan, I look forward to returning sometime in the future. My tenure as Consul General marks my third time working in Pakistan, and I hope not my final time living in this beautiful country! I also leave confident that the US-Pakistan partnership in Punjab Province and beyond willcontinue to grow. Thousands of Pakistani alumni of US exchange programs are playing a vital role in introducing the skills and knowledge from their US programs into their local communities. Thank you, Punjab Province, for the very warm welcome that you gave me, and that I know you will give to my successor. The writer is the consul general of the USA in Lahore
Business Recorder
16 hours ago
- Business Recorder
Modi announces $565-million credit line for debt-plagued Maldives
NEW DELHI/COLOMBO: Indian Prime Minister Narendra Modi announced a $565-million credit line and launched free trade talks with the Maldives on Friday during a visit to the Indian Ocean archipelago, where India competes with China for influence. Modi's two-day trip is aimed at boosting India's development partnership with the Maldives, and he said the credit line was central to that goal. 'This will be used for projects linked to infrastructure development in line with the priorities of the Maldivian people,' he said, adding that the two countries would also finalise a bilateral investment agreement. They will work to deepen cooperation on multiple sectors including tourism, healthcare, and housing, Maldives President Mohamed Muizzu said. 'Looking ahead we are fully committed to further strengthen our cooperation with India across a broad range of sectors through exchange of high-level visits,' Muizzu added. India, UK trade deal signals Modi's priorities as New Delhi eyes EU, US pacts Modi is the first foreign leader to visit Muizzu since he took office in 2023, pledging at the time to end the Maldives' 'India first' policy, and taking steps to strengthen ties with China. Muizzu's moves briefly soured relations with New Delhi, before India helped to prevent the $7.5 billion economy from defaulting on its debt as the Maldives struggled to get tourists to its white-sand beaches and luxury resorts. He has since visited both countries, the Maldives' main bilateral lenders, to secure financial support, as well as signing trade pacts with China and Turkey and initiating talks with India on a trade agreement and an investment treaty. Modi will also remotely inaugurate an expansion of the international airport on the island of Hanimaadhoo, which India is helping to finance, and attend Saturday's celebration of the Maldives' 60th anniversary of independence from Britain.
