India’s automotive industry is one ofthe most promising and competitive in the world market and this sector is havinghuge potential to progress in the near future. The increasing GDP andeconomical wealth have improved during the last decade which has increasedpurchasing power of the Indian purchaser specially in the car segment, which is most promisingsector and has shown remarkable growth rate in the recent time in terms ofproduction, sales and exports (The Equicom Research, 2013). Despite slowdown ineconomy, shortage of skilled labor, diminishing export and saturating domestic urbanmarkets this sector has shown marvelous growth rate in recent decades .
Thepassenger vehicle market, which constitutes around 80 per cent of automobilesales, has shown significant growth potential as passenger car in 2011 which isaround 13 per 1,000 persons (Delloite, 2011) is increased to around 18 to 20per 1,000 people in 2012-13 (Trefis, 2013). According to a recent study by theInternational Energy Agency (IEA), passenger car ownership in India will growby more than 700 % over the next two decades .According to Mr. GuillaumeSicard, President, Nissan India Operations, the income tax rate cut forindividual tax payers earning under Rs 5 lakh per annum will create a positivesentiment among likely first time buyers for entry level and small cars. TheIndian automotive sector is estimated to grow more than a rate of 10-15 per cent to reach US$ 16.5 billion by2021 from around US$ 7 billion in 2016. This industry has the potential togenerate up to US$ 300 billion in annual revenue by 2026 and automobile sectorgenerated 65 million additional jobs and contribute over 12 per cent to India’sGross Domestic Product.
Asautomobile industry is one of the important and key drivers of economic growth inour country. The manufacturers in the field of automotive sector have to takesup a leading role in terms of quality expectations of customers, productvariety and complexity in manufacturing process. Driven by globalization andincreasing customer expectation the manufacturers are trying to offer a largerange of vehicle models and options to their customers. The enormous productvariety-induced complexity and the pressure from outside players the competitionis very tough and makes it hard to ensure effective & efficient logistics.
Dueto this reason entire supply chain in automotive industry from allocation,storage of raw materials, timely procurement of spare parts, manufacturing offinished goods and delivery to customer is very important aspect . Theuse of best supplychain management practices is one of the major challenges to automakers forachieving competitive advantage, especially in emerging markets like ours.Therefore it is required to examine various aspects of automobile supply chainsin an emerging market which has its own peculiarities.
The present researchseeks to bring out challenges and complexities in automobile supply chains and presentingemerging trends from the global automotive industry and its applicability in indiancontext. This study mainly concentrate onthe issue that directly & indirectly impact the design and practices ofsupply chain strategy and supply chain flexibility dimensions on the supplychain performance. Every company has a target to set best strategy &flexibility to enhanced performance.