Economic the country. The Indian auto industry

Economic growth of any nation(either developing or developed) is mostly
dependent on its key industry and its key resources .The automobile industry in
our country has shown a constant and considerable growth and proven to be one
of the best ever growing and the prime movers of economic growth
and major contributors towards the Gross Domestic Product (GDP) roughly
around  7 % and due to rapid technological
innovation, there is  tremendous growth
in demand, and it generated huge employment in organized and unorganized
segment Gottschalk and Kalmbach, 2007. The recent decade is eyewitness of the
significant growth of automobile sector of developed countries and latest trends
and innovations and better government policies open a new chapter in automobile
sector for developing nation like India Choudhary and Goyal, 1997

Due to economic
globalization and government policies the automobile industry in india has shown
a enormous market potential. Rapid technological changes and remarkable
development in the field of science and technology, especially in communications
and transport helps a lot to automobile industry .The government of India (GoI)
has made tremendous changes like implementation of Goods and Services Tax (GST),
ban on BS-III vehicles to control pollution, Bharatmala project and government’s
ambitious plans for a mass scale shift to electric vehicles (EVs) by 2030.Government’s
new and innovative  policies give opportunities
for overseas players to investments in the country. The Indian auto industry contributing
around 6-8 % of world market producing around 2.6 Million unit’s .The industry
accounts roughly 7% of the country’s Gross Domestic Product (GDP). With around
roughly 81 % of market share the two wheeler segment is the leader of the Indian
automobile market owing to a growing middle class and a young population. India
is having a huge rural market hence companies are taking interest and exploring
the rural markets further aided the growth of the sector. The overall passenger
vehicle (PV) segment has around roughly 13 % market share. Figure 1 shows segment
wise market share of automobile industry in India which shows total production
of automobiles in units (millions)  year
wise.

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Figure1.1:
Segmentation of market share of automobile industry in India

The gross turnover of
the automobile manufacturers is shown in Figure 2 as per SIAM (Society of
Indian Automobile Manufactures) report, which has shown gross turnover of
manufactures from 2009-10 to 2014-15 in USD

Figure
1.2 Gross Turnover of automobile manufactures 2009-10 to 2014-15 (Source: SIAM
report)

          India’s automotive industry is one of
the most promising and competitive in the world market and this sector is having
huge potential to progress in the near future. The increasing GDP and
economical wealth have improved during the last decade which has increased
purchasing power of the Indian purchaser specially in  the car segment, which is most promising
sector and has shown remarkable growth rate in the recent time in terms of
production, sales and exports (The Equicom Research, 2013). Despite slowdown in
economy, shortage of skilled labor, diminishing export and saturating domestic urban
markets this sector has shown marvelous growth rate in recent decades .The
passenger vehicle market, which constitutes around 80 per cent of automobile
sales, has shown significant growth potential as passenger car in 2011 which is
around 13 per 1,000 persons (Delloite, 2011) is increased to around 18 to 20
per 1,000 people in 2012-13 (Trefis, 2013). According to a recent study by the
International Energy Agency (IEA), passenger car ownership in India will grow
by more than 700 % over the next two decades .According to Mr. Guillaume Sicard,
President, Nissan India Operations, the income tax rate cut for individual tax
payers earning under Rs 5 lakh per annum will create a positive sentiment among
likely first time buyers for entry level and small cars. The Indian automotive sector
is estimated to grow around 10-15 per cent to reach US$ 16.5 billion by 2021
from around US$ 7 billion in 2016. It has the potential to generate up to US$
300 billion in annual revenue by 2026 and automobile sector generated 65
million additional jobs and contribute over 12 per cent to India’s Gross
Domestic Product.

As
automobile industry is one of the important and key drivers of economic growth in
our country. The manufacturers in the field of automotive sector have to takes
up a leading role in terms of quality expectations of customers, product
variety and complexity in manufacturing process. Driven by globalization and
increasing customer expectation the manufacturers are trying to offer a large
range of vehicle models and options to their customers. The enormous product
variety-induced complexity and the pressure from outside players the competition
is very tough and makes it hard to ensure effective & efficient logistics. Due
to this reason entire supply chain in automotive industry from allocation,
storage of raw materials, timely procurement of spare parts, manufacturing of
finished goods and delivery to customer is very important aspect .

The
use of best supply chain management
practices is one of the major challenges to automakers for achieving
competitive advantage, especially in emerging markets like ours. Therefore it
is required to examine various aspects of automobile supply chains in an
emerging market which has its own peculiarities. The current research seeks to
bring out challenges and complexities in automobile supply chains and presenting
emerging trends from the global automotive industry and its applicability in indian
context.  This study mainly concentrate on
the issue that directly & indirectly impact the design and practices of
supply chain strategy and supply chain flexibility dimensions on the supply
chain performance. Every company has a target to set best strategy &
flexibility to enhanced performance