The first week in December 2007 saw the launch of a new conference for the automotive industry in India, Automotive Logistics India. More than 130 delegates representing multinational and local logistics companies, global carmakers and Indian carmakers gathered to address the shortfalls and opportunities presented in the Indian auto market. Speakers came from Mahindra Mahindra, BMW, Maruti Suzuki, GM, VW India, Tata Motors and more to attend the high-profile event in India's capital New Delhi.

The message was clear - vehicle production in India is booming and the logistics companies must prepare for more growth. In addition to a significant and growing local market, Indian carmakers are already exporting more cars for customers overseas than China (200,000 in 2006). Subodh Marathe from Tata Motors told delegates that by 2015, logistics service providers in India will need to handle between six and eight million vehicles a year.

At the moment, 97 per cent of cars are moved by road and the rest by rail. His assessment of a nascent state of the industry was echoed throughout the lively three-day event. With a total absence of dedicated ro-ro export and import facilities at India's ports, virtually no dedicated rail cars for auto transport and huge distances to cover just within the country to move cars from the traditional and emerging production clusters (Delhi, Pune/Mumbai and Chennai/Bangalore) India's logistics companies face significant challenges simply getting cars to their customers. When the export market takes off further (by 2010 exports are likely to exceed 400,000 at a conservative estimate), the pressure on India's infrastructure threatens gridlock.

MM Singh, the head of production and logistics for Maruti Suzuki, India's biggest carmaker, highlighted how the rigorous implementation of lean production and logistics strategy at the joint venture's plant in Gurgaon had cut the plant's inventory level from four to five days to less than a day. However, with international carmakers moving into production in the Indian market at a rapid pace, many speakers reiterated how important it is for Indian carmakers to cut costs in their operations to meet the competition they will face for domestic market share in 2008/9 when those plants begin production.

Movement of cars and material in India between the states is still being hampered by excessive bureaucracy and differing tax laws. While the implementation of VAT in all states is being rolled out, progress is not as fast as the manufacturers would like, and often leads to delays of up to a day to move material between states.

The lack of capacity for automotive components and cars in India sparked repeated calls for carmakers and logistics providers to collaborate to fill back-hauls and initiate dedicated freight corridors, but Indian carmakers admitted that the traditionally competitive relationship between them would not make this easy to achieve. There is also no forum for discussion about automotive logistics in India, something that Kieran Rakhe from Maruti Suzuki suggested could be addressed by future Automotive Logistics conferences.