Logistics Management in Indian Automotive Component Industry

Logistics Management in Indian Automotive Component Industry

By

Nitin Gupta

Faculty, Marketing

ICFAI Business School

Hyderabad

Many of the leading firms in the Indian automotive component industry have an efficient logistics management system. Having an efficient logistics management system is no longer a choice but a necessacity for these firms considering the global opportunities that have opened for this industry.

Introduction:

The Indian automotive component industry has shown tremendous growth over the last decade. Today it has 480 companies, employees more than 2,50,000 people and has an estimated turnover of approximately Rs 45,000 crore (US$ 10 billion). On export front also, the industry has grown by leaps and bounds, generating an overseas sales of to Rs. 8,190 Crores (US$ 1.8 billion) in 2005-06, which is nearly three times of what it exported in 2001-02 (US$ 578 million)1. The tremendous growth in the automotive component sector over the last few years is shown in table 1:

Table 1: Growth in Production and Exports in the Indian Automotive Component Industry (Rs. mn and %) |

  | Production | Y-O-Y change | Exports | Y-O-Y change |

FY1998 | 120317 |   | 14935 |   |

FY1999 | 129967 | 8.0 | 15685 | 5.0 |

FY2000 | 163559 | 25.8 | 18330 | 16.9 |

FY2001 | 178569 | 9.2 | 27065 | 47.7 |

FY2002 | 216021 | 21.0 | 28019 | 3.5 |

FY2003 | 255354 | 18.2 | 34965 | 24.8 |

FY2004 | 306400 | 20.0 | 45000 | 28.7 |

Compiled by INGRES

Source: http://www.fadaweb.com/iaci.htm |

The automotive industry manufactured components fall under six broad product categories according to Automotive Component Manufactures association (ACMA). These are given in table 2.

Table 2: Classification of Automotive Components according to ACMA |

Product Group | Products | Share* (%) | Some of the Key Players |

Engine Parts | Pistons, Piston Rings, Engine Valves, Carburetors, Fuel Injection Systems | 23 | Motor Industries Company, Ucal Fuel Systems, Shriram Pistons,...