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Auto parts makers hold Rs 98,000 crore in inventory
The Hindu BusinessLine··6 Sept
Indian auto component firms hold about Rs 98,000 crore in inventory, a Vector Consulting Group report said. Better inventory management could free Rs 29,000-39,000 crore, including Rs 4,000-5,600 crore among MSMEs. MSMEs make up around 80 percent of auto component makers. The study covered 21 senior executives from July to August 2026 and was launched at ACMA's 66th annual session.
Prism
What It Means For You
- Vector said firms using consumption-based replenishment typically cut inventory by 30-40 percent.
- MSME auto component turnover is estimated at Rs 2.4-2.9 lakh crore.
- A 30 percent productivity gain on that base could add Rs 74,000-88,000 crore in annual turnover, the report said.
What's Happening
- The white paper is titled The Broken Flywheel: Building a Future-Ready Automotive Supply Ecosystem.
- Ninety-five percent of leaders surveyed said MSMEs are not investing fast enough for future growth.
- Plants averaged 75-85 percent utilisation even as 91 percent of respondents called capacity a major challenge.
Where Cash Is Stuck
- Vector Managing Partner Ravindra Patki said unused productive capacity, not only missing plants, limits output.
- The report links freed working capital to investment in technology, engineering and product development.
- It was presented at the Automotive Component Manufacturers Association of India annual session.
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