Business · India Bureau
Auto component makers sit on ₹98,000 crore inventory pile
India's automotive component suppliers are holding nearly ₹98,000 crore in inventory, with consultants suggesting that up to 40 per cent of this stock could be freed through better management practices.
LSN India ·
The automotive component industry has accumulated approximately ₹98,000 crore in inventory, according to a Vector Consulting Group report. Of this amount, ₹29,000-39,000 crore could potentially be released by implementing improved inventory management strategies, the analysis found.
The potential working-capital release would be particularly significant for the MSME sector, which constitutes around 80 per cent of auto component manufacturers in India. The report identified ₹4,000-5,600 crore in potential savings within this ecosystem alone.
Vector Consulting Group's white paper, titled The Broken Flywheel: Building a Future-Ready Automotive Supply Ecosystem, noted that firms implementing consumption-based replenishment approaches typically achieve inventory reductions of 30-40 per cent. The findings were based on the consulting firm's implementation experience across the sector.
India's automotive component MSMEs generate approximately ₹2.4-2.9 lakh crore in annual turnover, according to the study. The research involved interviews with 21 senior industry executives and was conducted between July and August 2026.