Maruti Suzuki Confirms No Operational Disruption Amid Rare Earth Magnet Crisis

New Delhi: Maruti Suzuki India on Thursday clarified that its operations remain unaffected by the ongoing rare earth magnet supply crisis, despite growing concerns over China’s export restrictions on these critical materials.

Recent reports had suggested that the production schedule of Maruti's upcoming electric SUV, the e-Vitara—slated for launch in India by the end of September—might be impacted due to potential shortages. However, the company dismissed any immediate concerns.

“As of now, there is no disruption to our operations due to the rare earth situation. The scenario is uncertain and continues to evolve,” a company spokesperson said during the announcement of Bharat NCAP safety ratings for the Dzire compact sedan and the Baleno premium hatchback.

“We are actively monitoring the situation and exploring multiple solutions to ensure smooth operations. If any material impact arises, we will inform stakeholders in accordance with regulatory requirements,” the spokesperson added.

The rare earth magnet crisis has raised alarms across the Indian automotive sector, especially for electric vehicle (EV) manufacturers. Rare earth magnets, though inexpensive, are crucial components in EV motors. China’s tightening of export controls—including the need for export licenses and detailed end-use declarations—has triggered concerns over potential delays and supply shortages.

According to a report by Crisil Ratings, a disruption lasting more than a month could delay EV launches, hinder production, and dampen sector growth. India currently sources over 80% of its rare earth magnet imports from China, highlighting its heavy dependence.

To address the risk, both the government and automakers are taking immediate and long-term measures. In the short term, companies are building strategic inventories, seeking alternative global suppliers, and ramping up local assembly through the Production Linked Incentive (PLI) schemes. Long-term strategies include accelerating domestic exploration of rare earths, developing indigenous production capacity, and investing in recycling infrastructure.

In the face of constrained supply, some manufacturers may also prioritize internal combustion engine (ICE) models, which require fewer magnets, potentially slowing the momentum of EV adoption.

In April, China, the world’s leading exporter of rare earth magnets, enforced new export regulations on seven rare earth elements and finished magnets. These rules require buyers to disclose specific end-use details and confirm that the products will not be used for defense purposes or re-exported to the United States.

Despite these challenges, Maruti Suzuki remains confident in maintaining its operations and meeting upcoming production targets.

With inputs from IANS