Indian auto majors in vortal pact

agencyfaqs! News Bureau

NEW DELHI, July 25

Eight of India's top automobile companies have come together to launch a vertical portal. The aim is to facilitate the management of the inbound supply chain for manufacturers of automotive vehicles. The eight manufacturers who form the core promoter group are Ashok Leyland, Bajaj Auto, Hero Group, Hindustan Motors, Maruti Udyog, Mahindra & Mahindra, Tata Engineering and TVS Suzuki. This combine accounts for well over four-fifths of the business that is transacted between vendors and OEMs (original equipment manufacturers) in India.

"The rapid communication and free exchange of information that can be facilitated by the Internet can help both buyers and sellers to reduce costs, speculation and wasteful processes as well as idle time," said a Maruti Udyog press release.

According to the release, the purpose of creating a vertical e-commerce portal for the automotive industry is to reduce cost of materials as also the cost of purchasing itself. With a big chunk of the business transacted through the vortal, the consolidation of demand would create economies of scale across the industry. The promoters believe that such a step will not only benefit the OEMs, suppliers and logistics operators but all tiers of the supply chain.

While the detailed business plan and the branding exercise are yet to be formulated, the promoters hope to seek the advice of an international consultant to assist in the finalisation of the enterprise sstructuring and its governance.

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