1. Market Research
  2. > Automotive Market Trends

Working Capital Management in the Automotive Industry : Lean Manufacturing Systems and Just-in-time Inventory Methods are Key to Achieving Working Capital Efficiency, Frost & Sullivan

  • January 2015
  • 49 pages
  • Frost & Sullivan
Report ID: 2621255


Table of Contents

Research Objective:

This research service is an analysis of working capital management in the automotive industry. It examines the key determinants of working capital requirements. Regional and segment-level analysis is provided. Disadvantages of inadequate working capital are also discussed. A case study of a company with adequate working capital is given to present the methods adopted to achieve it.

Executive Summary

$ million Money locked up in Asia in automotive working capital
Lean manufacturing systems and just-in-time inventory methods are the most important factors that manufacturers are adopting to improve working capital efficiency.
Manufacturers are negotiating with suppliers to increase payable days and are taking steps to reduce receivable days. Original equipment manufacturers (OEMs) are having better bargaining power in extending payable days.
Companies are preferring to have more liquidity as there are opportunities for industry consolidation—especially in the chassis segment where there is a lot of overcapacity.
Globalization has led to more exports of vehicles and components from the home country, which is increasing the cash conversion cycle.
Centralization of treasury operations; integrating working capital functions such as trade finance, cash management, and foreign exchange; and automating liquidity management and collection processes are among the measures taken for companies to increase working capital efficiency.


A total of $ x million of working capital was locked up in the entire automotive value chain for 2013, in proportion to the scale of operations. OEMs, which have the largest scale of operations, account for the largest share of total working capital. The chassis segment, which uses many raw materials such as metals and plastics, also has substantial working capital. The share of the tires and wheels segment is primarily due to the cost of rubber. Companies with more than 1 type of operations (Various) have multiple working capital requirements.
Locked-up working capital is in proportion with regional production. Asia accounted for nearly x % of global automotive production in 2013. Its production share is expected to increase since most demand is expected to come from emerging economies in the region. Its share of locked-up working capital, however, is less because most Asian manufacturers have a lean inventory system and just-in-time inventory method.

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 60 Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

Veronica helps you find the right report:


The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

Purchase Reports From Reputable Market Research Publishers

2017 Global Automotive Aftermarket Outlook

  • $ 10000
  • Industry report
  • March 2017
  • by Frost & Sullivan

B2B eCommerce, Uberization of Repair Services will Draw Investment and Determine Competitive Strategy Global vehicles in operation will increase significantly over the 2017–2018 period, driving new opportunities ...

Digital Transformation of the Automotive Industry

  • $ 10000
  • Industry report
  • March 2017
  • by Frost & Sullivan

Digitalization Spending to Grow Rapidly to $82.01 Billion in 2020 Research Scope In 2015, automotive industry investments in key focus areas were about $19.57 billion. Growing digitalization and advancements ...

Automotive Lightweight Materials Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024

  • $ 7795
  • Industry report
  • February 2017
  • by Transparency Market Research

Global Automotive Lightweight Materials Market: Overview This report analyzes and forecasts the market for Automotive Lightweight Materials at the global and regional level. The market has been forecast ...


Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.