No Crisis Yet, But Situation 'Precarious': SIAM's Shailesh Chandra on West Asia Conflict

India's auto industry isn't panicking due to the West Asia conflict. Not yet. However, there is an unease across the sector that has has already been cautious due to the chip crisis. With US-Iran peace talks failing, global freight conditions have grown increasingly unstable, with vessel rerouting pushing up both costs and journey times, according to Shailesh Chandra, President, SIAM.

Chandra also noted that production lines have so far remained unaffected. He also stated the situation is "precarious." 

Headwinds Looming

"So supply disruption is definitely a possibility if things worsen from where they are today. And that is something which we can only right now closely monitor. We have to see what is going to happen," Chandra told reporters in New Delhi.

"We are in very close touch with the government on all these topics. And we keep working with the government to see what best can be done, but if things get prolonged, if things worsen, then you are dealing with the inevitable," Chandra added.

His comments come at a time when the country's passenger vehicle market closed FY2025-26 with record annual sales, driven by tax relief, lower borrowing costs and GST cuts. For the full financial year, the segment clocked 46.43 lakh units which is a growth of 7.9 per cent over FY25. The fourth quarter alone delivered 13.16 lakh units, also a record for any Q4, up 13.2 per cent year-on-year.

LPG Crunch Speeds Up PNG Shift

According to the body representing major vehicle and engine manufacturers in India, owing to the LPG crunch, firms previously reliant on LPG have already moved to piped natural gas, with many others actively exploring ways to reduce their overall gas consumption.

"One good has happened due to the crisis is that a lot of auto companies have shifted to PNG in manufacturing. They are exploring ways to cut consumption," Chandra noted while adding, "There is no supply chain disruption as of now and the industry has been able to manage. We have to watch  the situation."