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Automobile

Maruti, Hyundai, et al. have a foggy view on demand. The way out: a tweak in the forecasting method

Automakers will have to be more innovative in terms of demand forecasts. Use of a scenario-based forecasting methodology for the next few quarters could help. Time-series forecasts, based on historical data, won’t work in these uncertain times. Every associated element of the business — from production to sales, and logistics to component supply — needs to adopt a flexible approach.
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c-shobha-mathur
13 Jun 2020 12 Mins Read 1 comments
A Maruti Suzuki car showroom in New Delhi. Getty Images
A Maruti Suzuki car showroom in New Delhi.
A long pause. Some deep frowning. A few jottings on a blank sheet. A shake of the head. And finally, “Sorry, can’t give you an exact number.” That’s mostly the sequence these days when you meet auto-industry executives and ask them how they see the demand scenario panning out in the
need to be shortened. Manufacturers with a high level of indigenisation can respond better to sudden demand changes, compared to others who may have to work on longer lead times to source parts from international suppliers/production centers, elaborates Arora from Mondriaan Group. It’s time for demand planners to tighten their seat belts. ( Graphics by Abdul Shafiq)
A long pause. Some deep frowning. A few jottings on a blank sheet. A shake of the head. And finally, “Sorry, can’t give you an exact number.” That’s mostly the sequence these days when you meet auto-industry executives and ask them how they see the demand scenario panning out in the need to be shortened. Manufacturers with a high level of indigenisation can respond better to sudden demand changes, compared to others who may have to work on longer lead times to source parts from international suppliers/production centers, elaborates Arora from Mondriaan Group. It’s time for demand planners to tighten their seat belts. ( Graphics by Abdul Shafiq)

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