Gas supply squeeze threatens auto component production, thousands of units stare at shutdown

Ather Energy factory

• Factories claim to have less than 4 days of gas supply
• To keep factories running, companies explore more expensive alternatives
• Industry bodies seek help from state and central authorities

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Small enterprises in Maharashtra dependent on gas-fired machines that manufacture automotive components could shutdown within a week, as supplies of commercial liquified petroleum gas (LPG) dry up, threatening production across the sector.

Industrial belts in Chakan, Pimpri-Chinchwad and Chhatrapati Sambhajinagar — which house factories of several Tier-2 and Tier-3 vendors along with major manufacturers of two-wheelers, cars and trucks — have appealed to state and central authorities to urgently restore gas supplies.

Speaking to Moneycontrol, Utsav Machhar, president of the Chamber of Marathwada Industries and Agriculture, said several factories were already running dangerously low on fuel.

“Some factories have just two-four days of supply of gas left. If there is a sudden stoppage, then there will be wastage loss also because plants typically take 24-48 hours to restart. There is a panic situation right now because there is no direction of where this is heading,” Machhar said.

Industrial zones such as Chikalthana, Shendra, Waluj and Bidkin in Chhatrapati Sambhajinagar are among the worst hit. The cluster houses a large number of companies producing assemblies, gears, shafts, shifter forks, machined forgings, machined castings, fasteners and cold-forging parts used in automobiles.

Shutdown worries

Industry bodies in other states have also sounded an alarm. The Sanand Industries Association in Gujarat warned that continued disruption in gas supplies could interrupt component deliveries and may even force temporary shutdowns at some units. The Sanand belt supplies parts to Maruti Suzuki, Honda Motorcycle and Scooter India and Tata Motors.

Though smaller in scale compared with Tier-1 component manufacturers, these enterprises play a crucial role in the automotive supply chain. Any disruption in their production can trigger a cascading impact across the industry.

A senior executive at Bajaj Auto confirmed to Moneycontrol that production disruptions were expected in the coming days because of the imminent halt in operations at several vendor facilities.

Ashok Leyland, Royal Enfield, Tata Motors, Volkswagen, VE Commercial Vehicles, Piaggio, Mahindra & Mahindra, John Deere, Kubota and Nissan among others rely on components sourced from these smaller units. Tier-1 suppliers such as Bharat Forge, Varroc, Belrise, Sona Comstar, Delphi, Endurance and Gabriel also procure parts from these firms.

“Oxygen gas and LPG is used for metal heat treatment, heavy thickness metal cutting, powder coating and hardening. Production will get impacted severely if gas supplies do not return to normalcy. In fact, the cutback in production has already started,” said Jaidev Akkalkote, managing director of Sahyadri Industries and president of the Chakan Industrial Association.

Thousands of units stare at disruption 

The consumption of liquified natural gas (LNG) in the Chhatrapati Sambhajinagar industrial belt is estimated to reach 250-300 tonnes a day this year, up from about 150-200 tonnes per day in FY25.

Machhar said the number of companies affected by the disruption could run into thousands.

“The total number of companies affected by this disruption could be 2,500. These are into steel, engineering, auto components, pharma, breweries, food processing and companies that use boilers and thermic fluid heaters,” he said.

With inventories of gas running thin and alternative fuel options limited, industry executives warn that the coming days will be critical for maintaining production across India’s automotive supply chain.