Skoda India sees no immediate impact of rare earth magnet supply crisis on its production
Skoda Auto India claims that it is not facing any disruption owing to the rare earth magnet supply chain crisis. Check Offers
Skoda Auto India, the Czech automobile manufacturer under the Volkswagen Group, claims there is no disruption to its production operations due to the ongoing rare earth magnet crisis that has resulted in the Indian automobile industry hitting the panic button and lobbying the government seeking a resolution. The premium car manufacturer that currently sells models such as Kylaq, Kushaq, Slavia and Kodiaq in the Indian passenger vehicle market has claimed that it has enough stock of the crucial component.
Speaking to the media, Ashish Gupta, Brand Director of Skoda Auto India, has said that the auto company is facing no production disruption at present owing to the rare earth magnet crisis, and it has enough stock. However, he didn't reveal if the company suspects any production disruption in the near future.
Also Read : Rare earth magnet supply chain crisis: Indian auto industry in panic mode. Disruption and the way ahead
His comment comes at a time when several stakeholders of the Indian auto industry are suspecting a major headwind for vehicle production, especially for the models and variants that come equipped with high-end technology-aided features. Also, majorly impacted will be the electric vehicles, for which the rare earth magnets come as a highly important component. Interestingly, Skoda currently sells no electric vehicles. However, the rare earth magnets are key components for manufacturing internal combustion engine (ICE) vehicles as well.
Over the last few weeks, automakers such as TVS Motor Company, Bajaj Auto, as well as the industry body Society of Indian Automobile Manufacturers (SIAM) have expressed their anxiety over the ongoing crisis, which started as China that controls over 90 per cent of the global rare earth magnet production has put a curb on the rare earth material exports earlier this year. The industry stakeholders believe the Indian auto industry is likely to see a major production disruption in July or August this year, if the crisis continues. The industry players have even expressed anxiety that some of the vehicle models and variants may see production shutdown.
Check out Upcoming Cars in India 2024, Best SUVs in India.
First Published Date: 12 Jun 2025, 11:55 AM IST
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hans India
20 minutes ago
- Hans India
Renowned Businessman Sunjay Kapur Passes Away Peacefully
Sunjay Kapur death News: Industrialist Sunjay Kapur who was once married to Bollywood actress Karisma Kapoor Sunjay Kapur passes away from a heart attack in the United Kingdom on Thursday (June 112, 2025). Business consultant Suhel Seth revealed to ANI that during a match Kapur swallowed a bee by accident which might have led to the irritation. Sunjay Kapur industrialist obituary passing occurred during his marriage to Priya Sachdev who worked as an entrepreneur and previously modeled. 'Deeply saddened at the passing of @sunjaykapur: Seth reported Kapur's passing earlier today while in England and expressed his deepest condolences to his family and colleagues on his X handle. Sunjay Kapur passes away at 53 Sunjay and Karisma had a publicized wedding ceremony in 2003. Their relationship encountered difficulties which eventually resulted in their divorce by the year 2016. Together they have two children named Samaira their daughter and Kiaan their son. Sunjay held prominence in business industries as well as Bollywood sectors. His final social media post discussed the recent Air India plane crash in Ahmedabad that resulted in 241 fatalities. The tragic Air India crash in Ahmedabad brings terrible news. I keep all the affected families in my thoughts and prayers. He expressed his wishes for strength to families during this difficult time in correspondence hours before his death. As a visionary leader and compassionate individual, Sunjay's guidance led to Sona Comstar's success. Karisma Kapoor ex-husband dies had unique vision along with his core values and relentless commitment to excellence established a permanent legacy at the Company. Sona Comstar expresses sincere condolences to his family and friends along with everyone who was touched by his exceptional life through this statement. Sona Comstar developed into a worldwide leader under his guidance particularly within the electric vehicle market. He recently received his appointment as Chairman of the Confederation of International Industry's Northern Region. Indian business tycoon death managed operations throughout several regions which included Delhi, Punjab, Haryana, Rajasthan among other states. Business associates and close friends have both expressed tributes after his passing.
Time of India
23 minutes ago
- Time of India
Dubai school fees soar by up to Dh5,000: How are parents coping with the hike?
As Dubai school fees increase by up to Dh5,000, parents are adjusting by paying upfront for discounts or considering school transfers. A wave of school fee hikes has been announced across Dubai, leaving parents to either adapt to the higher costs or consider alternative schooling options. While some families are grappling with increases of up to Dh5,000 annually for each child, others are managing more modest hikes of a few hundred dirhams. Despite the widespread rise in fees, many parents are exploring ways to cope, from paying annual fees in lump sums to researching more affordable institutions. Fee Hikes: What's Driving the Increase? In May 2025, Dubai's Knowledge and Human Development Authority (KHDA) approved a 2.35% increase in the Education Cost Index (ECI) for private for-profit schools for the 2025-2026 academic year. This decision allows schools to adjust their fees based on individual school grades, as determined by the results of the Dubai School Inspection Bureau (DSIB) and the ECI. The change impacts families across Dubai, who have started receiving notifications about the fee increases. The adjustment is part of a broader effort to account for inflation, rising operational costs, and other financial pressures faced by schools. However, while some parents are facing steep increases, others are relieved by more manageable hikes. A Mixed Reaction from Parents Many parents are already feeling the financial strain of the fee hikes. For example, Manal, a Dubai resident with children attending an Indian syllabus school in Al Quoz, shared that her family's total fee increase will amount to Dh400 per year for both of her children. 'I am very glad that the increase is manageable and not a huge burden,' Manal said. 'We had budgeted for an increase this year so we were not caught off-guard,' Khaleej Times reported. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo In contrast, some families are facing much steeper hikes. Vivek, an Indian expat with two children enrolled in a premium school, revealed that his children's school fees currently range from Dh87,000 to Dh92,000 annually. The recent fee hike will cost him an additional Dh10,000 per year for both children. 'However, our school gives the option of paying the entire year's fees in one go,' Vivek said. 'This has given us a lump sum discount, so the total fee increase for me has come to about Dh3,000 per year for both children. ' Meanwhile, other parents like German expatriate Greta, whose three children attend a British syllabus school in Jumeirah, are feeling the squeeze. 'I got the email yesterday that my school fees have been hiked by Dh2,000 per child per annum,' Greta shared. 'That's a total increase of Dh6,000 per year in school fees alone. The books, uniforms, and other study material are not included in that.' Greta admits that she cannot consider switching schools because her eldest child will be entering Year 11 in the upcoming academic year. Instead, she and her husband are adjusting by cutting back on some extracurricular activities to offset the additional costs. The Growing Need for Affordable Options For some parents, the fee hikes have become too much to bear, prompting them to consider transferring their children to more affordable schools. Mohammed Iqbal, whose children attend a British syllabus school in Qusais, expressed relief as his school's increase was relatively modest, Dh1,200 annually. 'I was expecting a little more than that, so I am very happy,' he remarked. On the other hand, parent R.M., whose children attend another British syllabus school, has seen fee increases two years in a row. 'Last year, our school increased fees by 4.55%, and this year again, they announced a 2.35% hike,' R.M. explained. 'While I understand that the cost for businesses is going up, it puts a burden on parents because unfortunately, salaries don't increase at the same rate as the costs. I began researching schools as soon as I heard about the fee hike, but then soon realized that changing schools would bring with it a fresh set of challenges. So we decided to stay put at our current one.' Umm Mohammed, another Dubai parent, decided to move her daughter to a more affordable school before the fee hike was announced. 'We were paying over Dh55,000 in annual fees at our previous school,' she recalled. 'It was already the higher upper limit of what we could afford. So last year, we decided to move her to another school. Now we pay Dh30,000 inclusive of school fees, uniforms, and books. When the announcement of the school fees came, I was relieved. At our previous school, the fee increase would have been really difficult for us. But now, the fee increase is about Dh1,000 per annum. It is very manageable for us. I think it was the best decision to move her," she added. The Bigger Picture: Dubai's Expanding Private School Sector Dubai's private school sector has been booming, with a 12% increase in student enrollment recorded in the 2023-2024 academic year. As of the latest figures, Dubai has 227 private schools serving 387,441 students from 185 different nationalities. The rise in student numbers has likely contributed to the increased demand for private education and the subsequent fee hikes. Despite the challenges, many parents still find value in Dubai's private education system, with some schools offering flexible payment options to help mitigate the financial strain. The diverse offerings of schools, from international curricula to specialized programs, also give parents more choices, though finding an affordable option in the current climate can be challenging.
Mint
26 minutes ago
- Mint
China's rare earth crackdown: Time to rethink these Indian EV stock holdings?
China's latest restrictions on exports of rare earth minerals have sent ripples through the global electric vehicle (EV) supply chain, leaving several Indian manufacturers in the firing line. The country accounts for nearly 70% of the world's rare earth mining, with the rest split among the US, Australia, and Myanmar. That dominance means any supply disruption can reverberate across industries, especially in countries like India that rely heavily on imports. With key components at risk, input costs may surge and production timelines could slip, tightening margins for Indian EV companies just as global competition intensifies. Read this | India's EV dreams are caught between rare earth and a hard place This article looks at three Indian EV players now exposed to the rare earth squeeze—and what the evolving crisis could mean for their near-term performance. #1 Maruti Suzuki First up is Maruti Suzuki, India's largest passenger vehicle maker by production and sales, and a subsidiary of Japan's Suzuki Motor Corp. Its lineup spans hatchbacks, compact SUVs, and premium sedans. Maruti has reportedly slashed its near-term production target for the electric SUV e-Vitara by nearly two-thirds due to a shortage of rare earth materials. The company now plans to produce just 8,221 units between April and September, down from 26,512. A company document cited supply constraints in rare earth elements as the main reason. Unveiled at the Bharat Mobility Global Expo 2025, the e-Vitara was intended to be a marquee launch, with FY26 sales targeted at 70,000 units. Parent Suzuki has also scaled back its India ambitions. It recently lowered its FY31 sales target from 3 million to 2.5 million vehicles, trimming its planned EV lineup for India from six models to four. India remains Suzuki's largest market by revenue, but these revisions suggest a cautious approach at a time when global and local rivals are accelerating. Despite the strategic retreat in EVs, Maruti Suzuki has performed strongly over the past five years. Revenue has grown at a 15% CAGR, powered by post-Covid recovery and improved capacity utilization. Net profit has expanded at an even faster 35% CAGR, reflecting healthy operating leverage, a better product mix, and cost efficiencies. The company's balance sheet is among the strongest in the sector, with zero debt, a 16% return on equity (RoE), and 21.76% return on capital employed (RoCE) - metrics that outshine peers like M&M and Tata Motors. To drive future growth, Maruti is betting on a broader SUV and BEV portfolio. It has committed ₹8,000-9,000 crore in capex to expand annual production capacity to 4 million units, and plans to launch six EVs by FY31. However, its EV ambitions may be derailed if rare earth supplies remain tight. Read this | China's rare earth export curbs are India's wake-up call The market appears to be factoring in these headwinds: Maruti shares are down 3.5% over the past year. The stock trades below its 10-year average of 37.3x at 26.9x P/E, suggesting the market is pricing in some of these near-term challenges and uncertainties around its EV transition. #2 TVS Motor Next is TVS Motor, India's largest electric two-wheeler maker and the only domestic OEM with fully in-house EV and connected tech capabilities—from batteries to infotainment systems. TVS holds a 24% market share in the electric two-wheeler space (as of May 2025), led by its flagship iQube. It has also launched the electric three-wheeler EV King Max, expanding its portfolio. In a recent interview, managing director Sudarshan Venu acknowledged looming supply chain disruptions from China's export curbs. He warned of possible production halts and price hikes, and expects the impact to reflect in industry-wide numbers by June or July. EVs currently contribute 9.3% of TVS's revenue, and several new models are nearing launch. While long-term prospects remain solid, rare earth volatility poses clear near-term risks. Over the past five years, TVS has delivered strong growth: Revenue has risen at a 19.5% CAGR and net profit at a 31.6% CAGR. The company's broad presence across motorcycles, scooters, and mopeds has helped build scale and market depth. Operating profit margins have improved from 12% in FY20 to 15% in FY25, driven by cost discipline and a more premium product mix, likely driven by higher-margin premium motorcycles and EVs. This has translated into a robust RoE of 28.9% for the company – highest among its peers. However, RoCE stands lower at 19.4% mainly due to a higher debt burden. TVS Motor's debt-to-equity ratio stands high at 1.73x as capital expenditures have been significant (Rs. 1,800 crores in FY24 standalone), primarily for new products and technology (including EV and three-wheeler EV), these are seen as investments for future top-line growth and improved free cash flow in the long run Read this | TVS Motor posts 75% profit growth, but worries about capital allocation persist Shares are down 1.11% over the past month, likely reflecting concerns about EV supply constraints, but are still up 12.8% over the past year. Valuations are rich: TVS currently trades at a P/E of 58.9x, well above its 10-year average of 47.6x. This premium pricing suggests that a large part of its future growth potential may already be factored into the stock price. #3 Sona BLW Precision Forgings (Sona Comstar) The third company under pressure is Sona Comstar, a global mobility tech firm that supplies EV and non-EV components to OEMs around the world, including Tata, Maruti Suzuki, Bajaj Auto, and M&M. Unlike Maruti and TVS, which have avoided detailed commentary, Sona Comstar has been upfront about the risks. On its March 2025 earnings call, it explicitly flagged the potential for global production disruptions due to reliance on Chinese rare earth materials, especially magnets critical to EV powertrains. To mitigate this, management is engaging with stakeholders including the Chinese embassy, while also exploring alternative technologies such as ferrite magnets and non-China sourcing. Still, the pinch is already being felt. China reportedly rejected one of the company's two applications to import rare earth magnets in late May. The second is still under review. Sona Comstar is actively working with OEM partners to balance performance trade-offs in rare-earth-free motors, though that transition could come with cost and timeline challenges. Despite the external headwinds, the company's fundamentals remain robust. Over the last five years, the company's revenue has grown at a CAGR of 28.1% driven by rising electrification trends and increased global traction in powertrain solutions while net profit has grown at a CAGR of 10.8%. Operating profit margins (OPM) have also remained healthy and stable, ranging between 23% and 29% during this period. Its 5-year average OPM stands at 27.2%, well above peers like Bharat Forge and Samvardhana Motherson who have OPMs in the range of 9-18%. Return ratios, too, stand robust with an RoE of 15.1% and RoCE of 18.7%. Debt-to-equity ratio stands low at 0.04x. The company is sharply focused on the EV segment: EVs account for 39% of its total revenue, and a massive 77% of its ₹24,000 crore order book comes from EV programmes. This makes it especially vulnerable to rare earth shortages. While Sona Comstar is proactively exploring solutions, the transition may impact cost structures, product performance, and timelines. Investors must watch how effectively the company manages this material transition and whether it can maintain its technological edge and margins amid supply chain reengineering. Shares have fallen 22% over the past year, underperforming broader auto component peers. The stock trades at a P/E of 51.7x, below its 5-year average of 76x, though still expensive. Also read | Automakers urge Indian govt for diplomatic outreach to China for rare earths Conclusion All three companies—Maruti Suzuki, TVS Motor, and Sona Comstar—have strong long-term fundamentals and strategic clarity. But in the short term, the rare earth supply crunch is a real and rising risk. Production timelines, margin structures, and investor sentiment may all be affected. China's new export rules demand end-use declarations, approvals from Indian ministries and the Chinese embassy, and final clearance from Beijing. Despite 30+ pending applications from Indian automakers, none have been cleared. Delays now exceed the promised 40–45 days, and a proposed dialogue between Indian auto bodies and Chinese officials remains stuck in red tape. For more such analyses, read Profit Pulse. Until there is more clarity on approvals and alternative sourcing, investors may want to tread carefully—and track closely how these companies adapt to a fast-moving supply chain challenge. About the author: Ayesha Shetty is a research analyst registered with the Securities and Exchange Board of India. She is a certified Financial Risk Manager (FRM) and is working toward the Chartered Financial Analyst (CFA) designation. Disclosure: The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers should conduct their own research and consult a financial professional before making investment decisions.
