In the current paper, using a sample data of 58 firms consisting of automakers and auto component suppliers across a 14-year period, we study the factors contributing to efficient inventory management in the Indian automotive Industry. We use fixed effects regression models to document trends in inventory holdings over time and how this varies across inventory types and across tiers in the supply chain. Our results show that inventory holdings have declined differentially across tiers and across different types of inventories. We find tier-1 suppliers reduced all components of their inventories with the help of TQM and lean efforts.