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Citation Information

Type Report
Title The development of auto component industry in India
Author(s)
Publication (Day/Month/Year) 2011
URL http://www.ihdindia.org/Formal-and-Informal-Employment/Paper-6-The-Development-of-Auto-Component-Ind​ustry-in-India.pdf
Abstract
As domestic demand for motorcycles and passenger cars expanded since the 1980s, small and medium enterprises (SMEs) entered into the rapidly expanding market of auto components.1 Although large enterprise with foreign and technical collaboration with foreign companies have maintained major share of critical components, SMEs which started business in the 1980s and 1990s, have grown. Some of them graduated from SMEs and became large enterprises. In the 2000s, new entry decelerated. Necessity of high technology raised initial investment amount and hiked entry barrier. Exports of auto components to replacement market increased in 2000s. Many SMEs concentrates on only exports. In addition to SMEs, tiny enterprises undertaking the machining of components and catering to domestic replacement market are facing severe price competition. In fact, number of establishments in the unorganized sector, which is employing less than ten workers declined. Competition might have excluded the tiny enterprises. Pune and Chnnai were traditionally clusters of auto component industry. After Maruti factory was set up, industrial area was developed for its suppliers. Delhi National Capital Region (NCR) became another cluster. Multi-national enterprises (MNEs) established their factories in the clusters to utilize cluster network. The purpose of this paper is to analyze change of industrial structure in auto component industry in the 2000s.

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