Fast-tracking Tech Adaptation In Auto Logistics

While the technology integration in automobile supply chain can bring in a higher level of efficiency, the cost of automation viz a viz cost of labour in India make them be on a slow path. However, in the post GST scenario, the next two to three years will be a gamechanging period for the auto logistics segment in India.

- Renjini Liza Varghese

Indian automobile segment for the past couple of decade has grown from a mere domestic supplier to a major exporter. That is not all; India is emerging as a manufacturing hub for the international brands. Thanks to the conducive manufacturing policies including the Make in India initiative.

The latest addition to the list is the India made Jeep Compass (SUV) that started its exports from the last week of October. It will be just days before one sees these made-in-India Jeeps plying on the streets of Australia and Japan. Though the US-automotive major General Motors had withdrawn from the Indian market, it still uses one of its facilities to manufacture small cars for exports.

Globally, the demand for automobiles is surging, Indian companies along with its global peers in the country started exploring newer markets.

Supply chain management plays a significant role in the whole process. Undoubtedly, logistics is the backbone of all industry. With inbound and outbound logistics requirement, it plays a crucial role.

According to a report published by the rating agency ICRA, Indian logistics industry is likely to grow at 9-10 percent over the medium term which would be primarily driven by the recovery in the economy. Outsourcing of non-core activities like logistics, warehousing and associated activities to integrated players is likely to push the share of the organised segment, the report said.

The report continued by stating, “The GST implementation will also support organised players as it will have three major implications - consolidation of warehousing network and a shift towards a 'hub and spoke' model, higher degree of tax compliance and creation of level playing field between express and traditional transport services providers by virtue of access to input tax credit.”