Abstract
The South African automotive industry is distinguished by the significance of its products and the variety of its inventory. There are essential strategic considerations that guarantee a quick time to market. Efficiently managing this crucial resource is essential to guarantee the strong competitiveness of automotive manufacturers. Capacity planning in the automotive sector involves calculating the most efficient production capacity needed to fulfil market demand effectively. Inventory management in the automotive industry involves overseeing the movement of raw materials, components and completed products across the supply chain. This study examines the significance of capacity planning and inventory management in improving operational efficiency and performance in the automotive industry. The study followed a quantitative approach with 215 employees in a car manufacturing company in Johannesburg, South Africa. Through a structural equation modelling (SEM) analysis, the results indicated a strong, positive, and statistically significant relationship (β = 0.830, p < 0.001) between Capacity Planning Practices (CPP) and Inventory Management Practices (IMP), suggesting that effective capacity planning directly enhances inventory management by optimising stock levels, reducing shortages or surpluses, and improving overall supply chain efficiency.