Automotive Logistics At The Cusp Of Transformation

The Indian automotive supply chain is about to enter a dramatic phase with the regulatory demand of Bsvi engines by 2020 and mission electric by 2030. the industry is facing new logistics trends, automation and on-time delivery demand amidst lower inventory models, while infrastructure support is undergoing a sea change.

- Nahida Jafferi

The Indian auto industry is a major contributor to the Indian economy and has pipped Germany in becoming the 4th largest auto market in the world with sales increasing 9.5 percent year-on-year in 2017. Two-wheelers dominate the industry and made up 81 percent share in the domestic automobile sales in FY18.

The industry vertical is a significant contributor to the overall Exim trade. Automobile exports grew 26.56 percent during April-July 2018. It is expected to grow at a CAGR of 3.5 percent during 2016-2026.

In the fast-moving international automotive industry, timing is key. Thousands of parts have to be delivered every day to keep production moving, and finished vehicles have to be at the right place and at the right time always. With the new regulations in place to shift from current BS IV engines to BS VI engines by 2020, the industry has to get ready to meet the supply chain requirements. New engines mean new costs and the vehicle manufacturers are investing in the technology to deliver, as per the new guidelines.

Commenting on the new BS VI engine rule, Prasad Dharmadhikari, Head Strategic Sourcing & SCM, Kirloskar Oil Engines Ltd (KOEL), said, “Currently, we need to manage the running supply chain. We also need to start working on new product development. We should ensure that standard parts are used.”