Determinants of Competitiveness of Indian Auto Industry

This study analyses the determinants of competitiveness in the Indian auto industry, based on a field survey and a quantitative and econometric analysis of secondary data. Auto industry has grown impressively in India in the recent years in terms of production, sales and exports. However, higher effective rate of protection for automobile industry distorts resource allocation and investment pattern. We recommend that this has to be brought down in a phased manner, along with strengthening of the anti-dumping mechanism and improvements in infrastructure. Given the high and increasing share of materials in total production costs, policy measures to reduce these costs including indirect tax cuts are needed. Scaling up of auto-component sector is needed, which requires better credit availability. Better policies are needed for R&D investments, design facilities, training, labour reforms, efficient energy use by small firms, more FDI, roadmap for emission standards, removal of inter-state tax differences by introducing GST and strict implementation of rules of origin. We hope this book is useful for policy-makers, researchers, management consultants and Auto Industry Experts in general.