SIAM calls for government support to drive growth in automotive logistics

The Society of Indian Automobile Manufacturers (SIAM) organised the third Automotive Logistics Conclave in New Delhi today.

The conference on the theme of ‘Optimising operational efficiency in automotive logistics’ saw participation from over 150 delegates from government, the logistics and automotive industries.

The seminar focused on countering challenges faced by the Indian outbound automobile logistics operators, calling for support from the government coupled with industry participation.

Speaking on the occasion, Vinod K Dasari, president, SIAM and MD, Ashok Leyland, said, “The automobile industry has been playing an important role in the economic development of the country, contributing 7.1% to the GDP. In India, the logistics cost is estimated to be around 14% of the GDP. We are keen to find out alternative ways like railways and waterways which will bring the advantage of lesser emissions and also add a safety factor.”

The outbound automotive logistics industry is faced with conflicting conundrums – while on one hand, the service level expectations of the Indian consumer continue to rise, on the other product complexity seems to have no upper limits leading to higher transportation costs. In addition, the industry is faced with poor infrastructure, complex regulatory framework and shortage of skilled manpower across the country.

Road transport has played a pivotal role in the growth of India’s automotive industry, however with increased volume, alternate modes become extremely critical.

Commenting on the significance of promoting other modes of transportation Prem Verma, chairman, SIAM Logistics Group and CEO of TML Distribution Company, said, “At present more than 95% of vehicle movement in India is through road transport. With the automotive industry expected to grow at a double-digit rate in the next decade, it is imperative that the reliance on road transport be minimised and considerable emphasis given to other modes like railways, inland and coastal shipping.”

Bipin Menon, director, Ministry of Commerce and Industry, said, “Cost is one of the biggest challenges faced by the logistics industry and measures to counter it will be crucial for the growth of the sector.”

The conference called for the government’s intervention and industry participation to tackle the various issues faced by the sector with the onus being on the government to create a favourable environment for the industry to grow. Government initiatives like logistics parks, LSP ecosystem development, standardisation of pricing, tariff plans and processes, existing infrastructure de-bottlenecking and capacity building and IT capacity building are cited as the growth drivers for the sector.

The ‘Waterways and shipping’ session which emphasised the role of these modes for the development of the logistics industry saw participation from Rabindra Agarwal, IAS, Joint Secretary, Ministry of Shipping and S Mahiyaria IRTS, Member (Traffic), Inland Waterways Authority of India.