Indian automotive market and supply chain management : In-detail study

Reading Time: 8 minutes

In this article a detailed study has been done for the supply chain management of few top automotive manufacturers which are having products from different segments of the automotive market like – two-wheelers, three-wheelers, passenger cars, good carriers, tractor, buses and trucks.
Starting with the industry introduction , individual manufacturers market share study, inventory details, account data following with some suggestions coming out from this study which could help the organization to smoothen their supply chain management to ensure better profitability.
Top companies like – Maruti Suzuki, Mahindra & Mahindra, TATA MOTORS, ASHOK LEYLAND, ESCORTS, EICHER, BAJAJ, HERO and TVS are the part of this whole study. These all OEMs are having electric vehicle in the market or in development phase now. So, it’s become import to track their supply chain management for whole vehicle portfolio.

A brief information about Indian Automotive Industry

The Indian automobile industry contributes almost 6.4% of India’s GDP and 35% of manufacturing GDP and is a leading employment provider.
The market scenario looks favorable and the future growth is also promising because of these points-
-Growing Demand
-Opportunities
-Rising Investment
-Policy Support

Automobile clusters and leading companies

Automobile Production, Sales and Export data for last six years

Category	2016 – 17	2017 – 18	2018 – 19	2019 – 20	2020 – 21	2021 – 22
Passenger Vehicles	3,801,670	4,020,267	4,028,471	3,424,564	3,062,280	3,650,698
Commercial Vehicles	810,253	895,448	1,112,405	756,725	624,939	805,527
Three Wheelers	783,721	1,022,181	1,268,833	1,132,982	614,613	758,088
Two Wheelers	19,933,739	23,154,838	24,499,777	21,032,927	18,349,941	17,714,856
Quadricycle	1,584	1,713	5,388	6,095	3,836	4,061
Grand Total	25,330,967	29,094,447	30,914,874	26,353,293	22,655,609	25,330,967

Category	2016 – 17	2017 – 18	2018 – 19	2019 – 20	2020 – 21	2021 – 22
Passenger Vehicles	3,047,582	3,288,581	3,377,389	2,773,519	2,711,457	3, 069, 499
Commercial Vehicles	714,082	856,916	10,07,311	717,593	568,559	716,566
Three Wheelers	511,879	635,698	7,01,005	637,065	2,19,446	260,995
Two Wheelers	17,589,738	20,200,117	21,179,847	17,416,432	15,120,783	13,466,412
Quadricycle	0	0	627	942	-12	124
Grand Total	21,863,281	24,981,312	26,266,179	21,545,551	18,620,233	17,513,596

Category	2016 – 17	2017 – 18	2018 – 19	2019 – 20	2020 – 21	2021 – 22
Passenger Vehicles	758,727	748,366	676,192	662,118	404,397	577,875
Commercial Vehicles	108,271	96,865	99,933	60,379	50,334	92,297
Three Wheelers	271,894	381,002	567,683	501,651	393,001	499,730
Two Wheelers	2,340,277	2,815,003	3,280,841	3,519,405	3,282,786	4,443,018
Quadricycle	1,556	1,605	4,400	5,185	3,529	4,326
Grand Total	3,480,725	4,042,841	4,629,049	4,748,738	4,134,047	5,617,246

Automotive manufacturers market share in different product segments

In-detail study for individual OEMs

Maruti Suzuki

• Maruti Suzuki India Ltd (formerly Maruti Udyog Ltd) is India’s largest passenger car company accounting for about 42% of the domestic car market.
• Originally, 74% of the company was owned by the Indian government, and 26% by Suzuki of Japan.
• In May 2007, the government of India sold its complete share to Indian financial institutions and MSIL is a company with a majority of foreign shareholding.
• Today, MSIL alone makes 1.5 million family cars every year. That’s one car every 12 seconds.
  

Maruti-Suzuki Product Portfolio

Maruti Suzuki sales-service channels and support

Mahindra & Mahindra

•Mahindra is one of the largest vehicle manufacturers by production in India.
•The company was founded in 1945 by K.C. Mahindra, J.C. Mahindra, and Malik Ghulam Mohammed.
•The company changed its name to Mahindra & Mahindra in 1948.
•It was ranked 17th on a list of top companies in India by Fortune India 500 in 2018.
•Its major competitors in the Indian market include Maruti Suzuki and Tata Motors.
•Dominates the SUV market.

Mahindra Automotive division product portfolio

TATA Motors

• Tata Motors is India’s largest automobile company. Has 64 subsidiaries (10 domestic, 54 abroad).
• No. 1 commercial vehicle manufacturer in India (Market share).
• 3^rd in passenger cars in India (Market share).
• 4^th largest manufacturer of buses globally.
• 5^th largest manufacturer of trucks globally.
• Company’s dealership, sales, services, and spare parts network comprises over 549 dealerships in 357 cities and 6,600 touch points.
• Global- Spread across 182 countries in 6 continents.
• Outperforms in terms of Indian CV exports with a 57% share.
• Jaguar Land Rover, Tata Daewoo, and Tata Hispano Motors some of its complete automotive production subsidiaries.
  

Tata Motors product portfolio

Ashok Leyland

• Ashok Leyland was founded in 1948 as Ashok Motors and became Ashok Leyland in 1955 .
• World’s largest supplier of defense logistics vehicles.
• 3rd largest manufacturer of buses in the World.
• 14th largest manufacturer of trucks globally.
• Portfolio of businesses with less cyclicality Footprint in five targeted international clusters.
• Range of contemporary products (2.5T-55T GVW, 19-80 Globally benchmarked business processes seats).
• World-class manufacturing facilities, for 170000 vehicles per annum.
  

Ashok Leyland product portfolio

ESCORTS

• ESCORTS is one of India’s leading engineering conglomerates and for over six decades.
• Its headquarters are located in Faridabad, Haryana.
• The company was launched in 1944 and has marketing operations in more than 40 countries.
• Escorts manufactures tractors, automotive components, railway equipment, and construction and material handling equipment.
• Escorts Limited was originally founded as Escorts Agents Ltd. in 1944 by brothers Har Prasad Nanda and Yudi Nanda. They started a family owned business, Nanda Bus Company, in Jammu.
  

Escorts product portfolio

•

EICHER

•Eicher Motors Limited is an Indian multinational automotive company that manufactures motorcycles and commercial vehicles, headquartered in New Delhi.

•Eicher is the parent company of Royal Enfield, a manufacturer of middleweight motorcycles.

•At present, Volvo Group owns 45.6% of VECV, although there are 122 other institutional investors on record.

•In 2020 VECV bought Volvo Buses India operations for ₹100 crores.

•The Eicher Group has diversified business interests in design and development, manufacturing, and local and international marketing of trucks, buses, motorcycles, automotive gears, and components.

Eicher product portfolio

BAJAJ

• Bajaj Auto Limited is an Indian multinational automotive manufacturing company based in Pune.
• It manufactures motorcycles, scooters and auto rickshaws.
• Bajaj Auto is a part of the Bajaj Group. It was founded by Jamnalal Bajaj in Rajasthan in the 1940s.
• The company has plants in Chakan, Waluj and Pantnagar. The oldest plant at Akurdi in Pune houses the R&D centre ‘Ahead’.
• Bajaj Auto is the world’s third-largest manufacturer of motorcycles and the second-largest in India.
• It is the world’s largest three-wheeler manufacturer.
• In December 2020, Bajaj Auto crossed a market capitalization of ₹1 lakh crore (US$13.6 billion), making it the world’s most valuable two-wheeler company.
  

BAJAJ product portfolio

Hero Motors

•Hero MotoCorp Limited, formerly Hero Honda, is an Indian multinational motorcycle and scooter manufacturer headquartered in New Delhi.

•The company is one of the largest two-wheeler manufacturers in the world, as well as in India, where it has a market share of about 37.1% in the two-wheeler industry.

•As of 27 May 2021, the market capitalization of the company was ₹59,600 crore (US$7.8 billion)

•Hero Honda started its operations in 1984 as a joint venture between Hero Cycles of India and Honda of Japan.

•In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent Hero Investment Pvt. Ltd. with the automaker.

•This decision came 18 months after its split from Hero Honda.

Hero product portfolio

TVS MOTORS

•TVS Motor Company (commonly known as TVS) is an Indian multinational motorcycle manufacturer headquartered in Chennai, Tamil Nadu, India.
•It is the third largest motorcycle company in India with a revenue of over ₹20,000 crore (US$2.6 billion) in 2018–19.
•The company has an annual sales of three million units and an annual capacity of over four million vehicles.
•TVS Motor Company is also the second largest two-wheeler exporter in India with exports to over 60 countries.
•TVS Motor Company Ltd (TVS Motor), a member of the TVS Group, is the largest company of the group in terms of size and turnover.

TVS product portfolio

Factors affecting firm performance

• Inventory Turnover Ratio —> should be HIGH
• Supply Chain Inefficiency Ratio —> should be LESS
• Supply Chain Working Capital Productivity —> should be HIGH
• Total Length Of Supply Chain —> should be LESS
  

Inventory Turnover Ratio

Supply Chain Inefficiency Ratio

Supply Chain Working Capital Productivity

Total Length Of Supply Chain

Supply Chain Length Optimization Techniques

•Proper planning and forecasting should be done for re-order point to reduce raw material inventory.

•Data driven management to improve re-order point and safety stock

•Have proper knowledge of Direct and indirect resource requirement, for correct order

•Keep an eye on overstock and understock

•Follow 5Es to optimize the inventory.

•Engage : Identifying and associating the concerned persons, processes of inventory management

•Establish: Initiating the various metrics for achieving goals and targets

•Embark: Launch the implementation of above by KPIs, SLAs etc. and also incorporate RMS.

•Empower: Rendering necessary guidance for upgrading system, process and technology.

•Ensure: Attentively monitor the outcomes of the initial strategic operation.

Industry wise comparison and analysis

Key Facts

Authors:
Vinod Dubey , Rakesh Ray, Rahul Vashisht (IIFT) , Shubham Jha (IIFT).

Read more stories related to latest EVs in Indian market: Auto Expo News