Coronavirus Impact: Phone, Electronics Companies Say Production To Be Hit If Situation Continues

Smartphone vendors and consumer electronics companies do not expect any immediate business impact in India on account of the coronavirus outbreak in China, but warned that production could be hit if the situation continues beyond February.

Consumer Electronics and Appliances Manufacturers Association President Kamal Nandi said brands usually stock for components for about a month.

"We generally plan for a month for the imported items. We had planned for holidays in China (Lunar New Year) but if the situation continues (on account of Coronavirus outbreak), it would be challenging for us in manufacturing," Nandi said.

He cited the example of air conditioners and refrigerators that see a scale up in production ahead of summers to cater to increased demand.

"A lot of components come from China, particularly electronics, because we do not have the complete ecosystem in the country. Therefore, it could get challenging if the holidays get extended beyond February," he said.

China's State Council had announced that the Lunar New Year/Spring Festival holiday will be extended to Feb. 2 across the country, which was earlier slated to end on Jan. 30.

Haier India President Eric Briganza said there is bound to be an impact on production.

"If it (production) gets delayed by a week or so, then there is no problem. But if factories do not open in February and the situation extends to March, then it would be (a problem) -- not only for my company but for a lot of brands that get their raw material and components from China," he said.

According to him, there could be an impact in the coming days and it could get severe if the holidays get extended, affecting production capability and supply of products in India.

India Cellular and Electronics Association Chairman Pankaj Mohindroo said there has been no impact as of now.

"However, there is a concern. There will be an impact on the (mobile phone) industry if the situation continue as it is," he added.

A Xiaomi spokesperson said its operations are not affected since it had planned ahead for the Chinese new year.

The spokesperson said the company -- which has the largest share of India's smartphone shipment -- has issued an advisory to employees on the virus epidemic in China.

"We are curbing any outbound and inbound travel to/from China till February end unless absolutely crucial for business," the spokesperson added.

Realme and Vivo declined to comment on the impact on operations.

China accounts for the lion's share of components used in making smartphones, televisions and other electrical appliances. These include components like printed circuit boards, mobile displays, TV panels, compressors and motors.

Wuhan in China has been the epicentre of the coronavirus outbreak that has so far killed 170 people. The virus has spread to various other countries, including India.

India reported the first case of novel coronavirus from Kerala on Thursday. A female student of a university in Wuhan has tested positive for the virus and has been kept in isolation in a hospital.

Panasonic India and South Asia President and Chief Executive Officer Manish Sharma said it is early to predict any impact.

"The impact, if any, will be known after Feb. 3 when China opens post holidays," Sharma said.