By Ravichandran Srinivasan
The logistics of new cars and SUVs in India have undergone a significant digital and structural transformation as of 2026. OEMs are moving away from traditional “handover” models toward integrated, real-time supply chains to manage record-breaking volumes – now exceeding 28 million vehicles annually. What has emerged is a far more data-driven, efficiency-focused ecosystem that blends operational discipline with sustainability imperatives.
Below is a detailed look at current best practices and operational benchmarks shaping the industry:
1.Stockyard Management & Tracking
Managing thousands of VINs across large stockyards has evolved from manual processes to IoT-enabled ecosystems, dramatically improving visibility and efficiency.
At the entry point, vehicles exiting final inspection are issued a parking ticket indicating bay or cell location. Drivers then park accordingly, ensuring structured yard organisation from the outset.
This process is further strengthened through:
- RFID & QR Integration: Vehicles are tagged at the production line, enabling rapid yard audits via handheld scanners – reducing counting time from days to minutes
- Digital Twins / Bays: Stockyards are mapped into digital grids, assigning each vehicle a precise virtual location (e.g., Row A, Slot 15)
- First-In-First-Out (FIFO): Systems automatically prioritise dispatch sequencing to avoid stock aging
- Battery Management: For EVs, State of Charge (SoC) is monitored to prevent dispatching vehicles with depleted batteries
Operational discipline extends to physical upkeep as well:
- Vehicles are repositioned every 15–30 days to prevent flat spots on tyres
- Wipers are lifted, keys secured inside vehicles
- Netted parking is increasingly used, especially for luxury vehicles, to protect against dust and bird droppings
2.Freight Structure & Transporter Viability
The freight ecosystem largely operates on Long-Term Contracts (LTCs), offering stability but also introducing structural cost pressures.
Freight pricing is influenced by:
- Distance + Vehicle Type: SUVs and luxury cars command a 15–25% premium due to reduced trailer capacity and higher insurance exposure
- Fuel Escalation Clause: Monthly or quarterly adjustments protect transporters from diesel price volatility
Despite strong volumes, transporter profitability remains constrained:
- Net margins typically hover around 3–5%
- High capital investment in specialised trailers
- Rising toll expenses
- Persistent “empty return” challenges
Larger fleet operators are better positioned to survive these pressures, given their ability to manage:
- Large workforce ecosystems (drivers, helpers, maintenance and administrative staff)
- Fleet stockyards in major cities
However, OEM-imposed requirements – such as mandatory servicing of carriers at authorised workshops (Ashok Leyland, Tata Motors, Volvo) – further add to operational costs.
3.Transit Norms & Damage Management
OEMs enforce strict Service Level Agreements (SLAs) across three critical parameters:
- Transit Time: Tracked via mandatory GPS; delays beyond a 4–6 hour buffer typically attract penalties
- Turnaround Time (TAT): Measured at both factory and dealership ends; dealer-side delays are being addressed through “night-drop” digital key systems
- Transit Damage: Governed by the Standard Transit Condition (STC) report, which categorises issues such as scratches, dents and glass damage
To strengthen accountability:
- High-definition cameras at dispatch points validate vehicle condition
- Lashing mechanisms are inspected daily before carrier departure
Performance-linked incentives are also gaining traction:
- Top 5 transporters are recognised based on SLA metrics
- Rewards may be biannual or annual
- Freight payouts are increasingly tied to performance scores
4.Multimodal Mix (2025–2026 Trends)
OEMs are actively diversifying logistics modes to balance cost, efficiency and sustainability:
- Road (Car Carriers):Still accounts for ~70% of volumes, especially for last-mile delivery to Tier 2/3 cities
- Rail (NMG / BCACM Wagons):Rapidly growing (~20–25%), preferred for long-haul routes (e.g., North–South corridors) to reduce carbon footprint
- Ro-Ro (Coastal Shipping): A niche but strategic option, used for routes like Chennai/Ennore to Kochi or Mundra to bypass highway congestion
5.Driver Welfare & Carrier Innovation
There is a clear shift toward professionalising the “Captain of the Ship” – the driver – recognising their central role in operational excellence.
Key initiatives include:
- AC Cabins: Increasingly mandated (notably by Mahindra and Tata) to reduce fatigue and heat stress
- Safety Technologies: Adoption of ADAS features such as lane departure warning and Electronic Braking Systems (EBS)
- Driver Health Programs:
1.Annual eye tests (Form 1A)
2.General health screenings under schemes like “Niramaya”
3.Dedicated driver rest lounges with proper sleeping and sanitation facilities
OEM-led engagement programs are also evolving:
- Annual driver meets (e.g., by Maruti) focusing on safe driving, rest discipline and health awareness
On the innovation front:
- LNG and electric heavy-duty tractors are being piloted for short-haul logistics to support green mobility goals
6.Automotive Logistics KPI Checklist
OEMs and Lead Logistics Providers (LLPs) track a comprehensive set of KPIs across three dimensions:
Operational Efficiency
- Fleet Utilisation Rate: Target >85%
- Empty Miles Percentage: Target <15%
- Placement Compliance: On-time trailer availability at factory gates
- Dwell Time: Average time spent at OEM yards and dealer locations
Quality & Safety
- Damage-Free Delivery (DFD): Target >99.7%
- Transit Lag (TL): Deviation between GPS ETA and actual delivery
- In-Transit Visibility: Percentage of fleet with active telematics
- Driver Fatigue Index: Flags drivers exceeding 6 hours without a 30-minute break
Sustainability & Welfare
- Carbon Footprint per VIN: Increasingly critical for ESG reporting
- Driver Health Ratio: Percentage of drivers clearing bi-annual health checks
7.Car Carrier Transport Company – Sample P&L Framework
Note: Figures are illustrative of a 10-Car Carrier operation in the 2025-26 financial environment.
Net Operating Margin (EBITDA):~9.1% (₹1.28 Cr)>Actual PAT (Profit After Tax) typically settles between 3-5% after factoring in depreciation and corporate taxes.
8.Strategic Observations
A few structural shifts are reshaping the economics and future direction of automotive logistics:
- The “SUV Squeeze”: The shift toward larger SUVs is reducing trailer load factors (from 8 small cars to 6 SUVs), necessitating freight rate recalibration
- Asset Aging Pressure: With BS6 norms and scrappage policies, fleet replacement cycles have tightened to 6–8 years, increasing debt burden
- Digital Documentation: Transition to e-PODs (Electronic Proof of Delivery) is now essential to accelerate payment cycles and reduce the traditional 60-day credit period
About the Author
With over four decades of experience across India and overseas markets, including a significant stint in Oman, Mr. Ravichandran Srinivasan brings deep expertise in process excellence, leadership, and team development. He has held senior roles at Maruti Suzuki Limited, culminating as General Manager, and has led large automotive dealership operations as COO/CEO, overseeing Sales, Service, Parts, and Used Car businesses. He also worked as Head of Logistics & Distribution Division in Saud Bahwan Group, Oman and Maruti Udyog Ltd, Gurgaon (presently MSIL). His international exposure and hands-on leadership across OEMs, distributors, and dealerships provide a comprehensive, results-driven perspective on the automotive ecosystem.