Rapidly increasing awareness of the consumers along with increasing rate of product innovation in automotive sector – makes it one of the most pressure-ridden industries. Massive changes in terms of economic growth – leading to increased affordability and purchasing power across the consumer segments – translates into increasing market base.
Despite the proposition that the automobile industry in India is supported by various factors such as availability of low-cost input material – primarily steel, low‑cost skilled labour, and robust R&D centres – happens to be fraught with many challenges. The average vehicle has around 30,000 individual parts. Each of those parts is either manufactured in-house or sourced from a third-party supplier or an outsourced manufacturing ancillary. A delay in any section of the supply chain can slow down the manufacture and distribution of critical supplies, resulting in the production line getting shut down.
Businesses in this Industry have to deal with compliance norms stipulated by stricter set of regulations – while dealing with the challenge to optimize and economize upon the processes to ensure that the margins are safeguarded as also being able to position the products to the customers – offering competitive prices in the respective segments.
Our insightful observation also understands the compulsion to control the obsolescence, which happens to be one of the biggest challenges facing this industry, triggered by varying market demands and frequent cancellations at one end, while shortening product lifecycle on the account of having to rapidly evolve upon the array of products to stay competitive in the marketplace – coupled with the need to help the ecosystem partners survive alongside.
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