SMEs and Globalization: A Delhi Automotive Study

Abstract

The automotive industry in India has metamorphosed from a virtually non existent, low-quality-low-volume industry to a conglomerate of one among world best auto manufacturers with highest growth rate with in last 15 years. The earlier studies revealed that Indian automotive industry was not competitive enough for the global market due to inferior quality, lower labour productivity and high cost of raw materials in India (Khisty, V., 2004)1. Recent trends show that Indian auto component industry has become the hub of high quality, low cost products. How the industry has changed in last one decade is an important burning issue to be analysed. The reforms adopted by the government have opened up tremendous opportunities for investment and technology transfer. Indian firms are now looking for joint ventures and technology transfer specializing niche technology and to complement their range of products with the world's latest and the best. It is important to know the dynamics of the industry while it is undergoing a tremendous restructuring. The various technological and non-technological innovations that have been brought in by the industry to capitalize on the opportunities in the wake of globalization need to be closely monitored. In India, the National Capital Region (NCR) of Delhi alone accounts for almost 40% share of the overall component industry. A case study based on automotive sector in the NCR of Delhi was initiated to examine the effect of Globalization, Competitiveness and Innovation. The study is a part of a major programme on the vast industrial growth in NCR. The main focus is on innovative activities and initiatives in enhancing capabilities in technology, RD export obligations and policies of progressive liberalization have actually brought confidence and dynamism in the industry.