Business model transition towards carbon-neutrality in automotive ancillaries – An emerging market perspective from India

Abstract

The extant discourse surrounding the imperative to embrace carbon management initiatives and achieve carbon-neutral operations presents fertile ground for deploying sustainable business models. These models incorporate Environmental, Social, and Governance (ESG) criteria and financial viability into their operational frameworks. Moreover, they engage with a diverse spectrum of stakeholders in business operations. The automotive ancillary sector follows a tiered structure globally, which remains partially unorganized in emerging markets such as India. Utilizing the Business Model Canvas as an analytical tool, this study evaluates the existing business models of the automotive ancillary sector in India in relation to net neutrality targets within an emerging economy to understand their sustainability implications, resource usage, waste generation, and overall environmental impact in terms of carbon management to reduce carbon emissions. The study then proposes a guiding framework for business model transition to achieve carbon neutrality in the automotive ancillary sector in emerging markets such as India. Methodologically, the research employs a case study approach to address the research questions. The findings elucidate disparities due to the lack of organization among tier 2 and 3 suppliers within business model elements between Indian and leading global automotive ancillary enterprises. A guiding framework with key pillars is proposed to facilitate the business model transition toward carbon-neutral operations.