The record
Written from the 1 report below. Nothing here is unsourced.
- A Vector Consulting Group report says about ₹98,000 crore is locked up in inventory in India's auto component industry, of which ₹29,000-39,000 crore could be freed through better inventory management.
- MSMEs, which make up around 80 per cent of component makers, could release ₹4,000-5,600 crore of that.
- The study also flags a capacity paradox: plants run at 75-85 per cent utilisation even as most leaders see capacity as a challenge, with changeovers, quality losses and poor material flow to blame.
- It argues the freed-up capital and productivity gains could be channelled into new capabilities for higher-value segments like batteries, electronics and software.
What to watch next
- Whether ACMA-member firms adopt consumption-based replenishment approaches that the report says cut inventory by 30-40 per cent
- Progress on MSME capability investment, which 95 per cent of surveyed leaders say is too slow
- Steps to convert existing installed capacity into productive output by addressing changeovers, quality losses and material flow
Who said what2
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Ravindra Patki
2 quotes · 1 outlet
“The opportunity is not simply about adding more capacity. A significant part of the capacity that Indian companies already have is not being converted into productive output,”
In the article
…respondents considered capacity a considerable challenge. Frequent changeovers, quality losses, rework and poor material flow reduce effective productive capacity despite installed capacity being available, it said. " The opportunity is not simply about adding more capacity. A significant part of the capacity that Indian companies already have is not being converted into productive output, " said Ravindra Patki, Managing Partner, Vector Consulting Group. "Unlocking the cash trapped in operations, improving the economics of the existing business, and then channelling the surplus into enhancing capabilities…
“Unlocking the cash trapped in operations, improving the economics of the existing business, and then channelling the surplus into enhancing capabilities will determine how Indian suppliers grow in the future automotive value chain,”
In the article
…simply about adding more capacity. A significant part of the capacity that Indian companies already have is not being converted into productive output," said Ravindra Patki, Managing Partner, Vector Consulting Group. " Unlocking the cash trapped in operations, improving the economics of the existing business, and then channelling the surplus into enhancing capabilities will determine how Indian suppliers grow in the future automotive value chain, " he added. According to him, India's automotive opportunity will ultimately be determined by how quickly capability can spread through the supplier ecosystem. The report said strengthening India's automotive supplier…
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Named India · Automotive Component Manufacturers Association of India · Ravindra Patki · Vector Consulting Group
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