The automotive component industry has around Rs 98,000 crore locked in inventory, of which Rs 29,000-39,000 crore could potentially be released by improving inventory management, according to a Vector Consulting Group report.
The report said the potential working-capital release could include Rs 4,000-5,600 crore within the MSME ecosystem, which accounts for around 80 per cent of auto component manufacturers in the country.
According to Vector Consulting Group’s white paper, The Broken Flywheel: Building a Future-Ready Automotive Supply Ecosystem, firms adopting consumption-based replenishment approaches typically reduce inventory by 30-40 per cent, based on the consulting firm’s implementation experience.
The total sample size comprised 21 senior industry executives, with the data collection period from July to August 2026.
The study also estimated that India’s automotive component MSMEs account for approximately Rs 2.4-2.9 lakh crore in turnover. A 30 per cent improvement in …
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