The case for a fully synchronized supply chain in India's automotive industry

The case for a fully synchronized supply chain in India’s automotive industry

After multiple quarters of muted performance, India’s automotive industry bounced back with a record-breaking October. Festive demand, GST cuts, and improved consumer sentiment brought more footfalls to dealerships. The positive trend flowed into the results as well, with Bajaj, Mahindra, and TVS reporting strong profits.

The momentum was not limited to OEMs. India’s auto components industry achieved a strong growth in the past fiscal year, with turnover crossing $80.2 billion, supported by domestic manufacturing initiatives such as ‘Atmanirbhar Bharat’ and Production Linked Incentive (PLI) schemes. Meanwhile, the aftermarket is also shifting gears as EV adoption accelerates—the EV aftermarket alone is projected to reach $14.3 million by 2033.

While companies are taking steps towards Industry 4.0 adoption and local manufacturing capacity has strengthened the outlook, several structural challenges still hinder the automotive ecosystem’s ability to scale efficiently.

What challenges are holding the auto industry back?

Supply chain disruptions

Raw material shortages, geopolitical volatility, and tariff pressures continue to strain operations. TVS Motors recently highlighted the scarcity of rare earth materials, which pushed EV inventory levels below 25 days despite strong demand. For component makers, the newly introduced 8% tariff by the U.S. has intensified pressure on export-dependent suppliers.

Mixed demand signals

Automakers face a complex balancing act between BEVs, HEVs, and ICE vehicles. Despite growing interest in EVs, 54% of Indian buyers still prefer ICE, according to Deloitte. This split has made demand forecasting increasingly difficult, leading to production delays, misaligned inventory, and higher planning costs.

Fragmented systems and poor visibility

Most OEMs and suppliers still rely on disconnected ERPs, WMSs, and TMSs. The lack of a unified view across sourcing, production, warehousing, and transportation leads to inefficiencies and slower response times. A NITI Aayog report categorizes these gaps as major barriers to supply chain effectiveness. 

 
Limited supplier collaboration

Blind spots across Tier-1, Tier-2, and Tier-3 suppliers prevent OEMs from anticipating disruptions early. Issues at the lower tiers often surface only when production is already affected, resulting in emergency procurement, inflated buffer stocks, and costly downtime.

Logistics inefficiencies and regulatory complexity

Rising freight costs, poorly coordinated multimodal flows, and limited in-transit visibility create delays across the value chain. At the same time, manufacturers must navigate evolving regulatory requirements—from BS6 Stage 2 standards and CAFÉ norms to E20 ethanol fuel readiness, ADAS requirements, and six-airbag mandates.

Sustainability pressures

As global and domestic expectations shift toward greener operations, automotive companies are under pressure to reduce emissions, build cleaner logistics networks, and improve resource efficiency. But without strong digital infrastructure to measure and optimize sustainability metrics, progress remains slow.

Why does India’s auto supply chain need end-to-end synchronization?

Modern automotive manufacturing can no longer rely on isolated pockets of excellence. OEMs and suppliers need total synchronization—where demand planning, production operations, logistics, and supplier collaboration operate as one continuous, intelligent flow.

Aniruddh Srivastava, who leads Industry Strategy and Solution Advisory for the Automotive and Aerospace industry verticals within the Europe and Asia Pacific regions at Blue Yonder, says:  
 

“Automakers constantly need to know what to make and when to make, based on customer commitments, capacity utilization, and materials availability. Without an end-to-end supply chain planning and execution platform, the material, assembly, and information flows required to sync all internal and external processes continue to be elusive.”
 

 

How does AI-driven planning and integrated execution help?

AI-enabled planning systems allow automotive companies to forecast more accurately, simulate scenarios, and create contingency strategies for supply disruptions or demand fluctuations. By combining forecasting with inventory optimization, companies can minimize working capital while ensuring parts availability.

Integrated execution brings logistics, production, and inventory movements onto the same real-time layer. This enables better coordination across plants, warehouses, and transport partners, reduces emissions through optimized routing, and significantly lowers freight costs.

What are the benefits of integrated planning?

A synchronized planning environment connects demand planning, supply planning, business planning, and advanced scheduling into a single decision-making loop. Manufacturers can align financial goals with operational capabilities, model network scenarios, anticipate constraints, adjust production plans instantly as demand changes, and optimize plant throughput using constraint-based scheduling.

How does synchronized execution improve operations?

When warehouse, transportation, and order management systems operate together, execution becomes seamless. Automated workflows, intelligent order sourcing, and real-time shipment visibility enable faster fulfillment and fewer delays. Lead times shrink, accuracy improves, and automotive companies can serve multiple markets and channels with greater reliability.

How do multimodal logistics and warehouse coordination work together?

Synchronizing inbound transportation with warehouse operations ensures that the right parts arrive in the right sequence for production. Coordinated multimodal flows reduce wait times, minimize congestion, and support just-in-time and configure-to-order strategies. This alignment reduces emissions, prevents production stoppages, and ensures vehicles are assembled efficiently and on time.

How does multi-tier visibility strengthen the supply chain?

End-to-end synchronization extends beyond OEMs to include the entire supplier network. Real-time visibility across Tier-1, Tier-2, and Tier-3 suppliers, carriers, forwarders, and customers enables proactive issue resolution before disruptions escalate. A connected, transparent ecosystem helps companies mitigate risk, enhance responsiveness, and maintain supply chain continuity even during volatility.

Moving forward

India’s automotive industry stands at a decisive moment. Growth is accelerating, innovation is rising, and consumer expectations are evolving rapidly. But to unlock the sector’s full potential, companies must move away from fragmented, reactive operations and embrace synchronized, data-driven supply chains.

End-to-end synchronization provides the foundation needed to build resilience, deliver speed and precision, and confidently navigate the complexities ahead. Explore how India-focused automotive innovations can help the industry move beyond boundaries.

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