Transcript
INTRODUCTION: The Indian automobile industry is one of the key drivers of industrial growth and employment, which will gain rapid importance. In order to accelerate and sustain growth in the automotive sector, a roadmap is needed to steer, coordinate and synergize the efforts of all stakeholders. Exogenous and endogenous factors affecting industry also affects the competitiveness of the firms. Competitiveness captures the awareness of both the limitations and the challenges posed by global competition as an exogenous factor. nderdeveloped economies tend to be competitive by producing cheaper products, developing economies by producing better products, and developed economies by producing innovative products continuously. Though Indian automobile manufacturers are manufacturing innovative products and leading India to a new summit, there are various roadblocks, which prevent this industry from being a global player.
COMPETITIVENESS DEFINED: Competitiveness has emerged as a paradigm towards the economic development. !ichael "orter has defined competitiveness as productivity with which a nation utilizes its human, capital and natural resources. To understand competitiveness, the starting point must be a nation#s underlying sources of productivity. "roductivity depends both on the value of a nation#s products and services $measured by the prices they can command in open markets $ and by the efficiency with which they can be produced. "roductivity is also dependent on the ability of an economy to mobilize its available human resources. True competitiveness, then, is measured by productivity. Competitiveness is a special challenge, because there is no single policy or grand step that can create competitiveness. Improving competitiveness is a marathon, not a sprint. %ow to sustain momentum in improving competitiveness over time is one of the greatest challenges countries are facing.
3. PORTER'S DIAMOND MODEL: "orter &'(()* contributed the diamond model on competitiveness, which analyses national &or industry* competitiveness through four ma+or dimensions factor conditions, demand conditions, firm strategy structure and rivalry, and related and supporting industries. "orter &'(()* concluded that due to various national characteristics, nations cannot succeed in all industries, and thus it is important to identify and develop their internationally competitive industries. Therefore, he proposed the diamond model with four ma+or &and two additional* determinants of competitive advantage in a particular industry. "orter#s diamond model provides an analytical framework with multi- measurements favorable for national or industry competitiveness. ccording to "orter &'(()* nations are most likely to succeed in industries or industry segments where the diamond factors are mostly favorable.
Factor Conditions: /or production are the inputs and infrastructure necessary for competition, which include 0 %uman resources 1uality and 2uantity of skilled labour, cost of personnel, and labour skill variety3 0 "hysical resources 4The abundance, 2uality, accessibility, and cost of the nation#s land, water, mineral, or timber deposits, hydroelectric power sources, fishing grounds, and other physical traits.5 0 6nowledge resources !arket, scientific, technical knowledge residing in a nation#s research institutions3 0 Capital resources Capital availability and cost to finance industries. Capital resources can be affected by the rate of savings and national capital market structure3 0 Infrastructure vailability and 2uality of infrastructure, including communication system, transportation system, payment or funds transfer, health care, and so forth
3.2. D!and Conditions: The nature of buyer needs, the size and growth rate of home demand, and the transferability of domestic demand into foreign markets. "orter has also described in his location competitiveness study, about the advantages arising by having sophisticated and demanding local customers or customers with unusual need for specialised varieties that are in demand.
3.3. R"atd and S#$$ortin% Ind#stris: Include parts and service suppliers and distributors in the supply chain. s "orter stated, competitive supplier industries can provide 4efficient, early, rapid, and preferential access to inputs5, which are basic production needs. !oreover, the geographic proximity with internationally competitive suppliers in the home nation helps build coordination and a communication network, which in turn improves production efficiency. 7ased on the availability and efficiency of supporting industries, the most significant benefit of homebased suppliers lies in the ability to accelerate innovation and upgrade in the overall auto industry.
3.& Fir! Strat%( Str#ct#r( and Ri)a"r It discusses the context in which firms are created,managed, and operated, given the domestic demand conditions, factor conditions, and supporting industry situations. In a developed industry, firms would build on the strengths provided by the source&s* of competitive advantage and invest in improving the less competitive factors. !oreover, as per his research, the fierce domestic competition forces firms to innovate constantly and improve productivity and hence increase national competitiveness in the industry. Thus, strong local and global competition not only sharpens advantages at home turf but also compels firms in the domestic market to sell abroad as growth strategy.
&. AUTOMO*ILE INDUSTR+ The automobile industry plays a pivotal role in country#s rapid economic and industrial development. It caters to the re2uirement of e2uipment for basic industries such as steel, nonferrous metals, fertilisers, refineries, petrochemicals, shipping, textiles, plastics, glass, rubber, capital e2uipments, logistics, paper, cement, sugar, etc. by either consuming it or supporting in logistics. 8ue to its strong forward and backward linkages with almost every segment of the economy, the industry has a strong and positive multiplier effect and thus propels the progress of any economy.
&.2. Prsnt Landsca$ o, t- Indian A#to Ind#str India is emerging as one of the world#s fastest growing passenger car markets and second largest two wheeler manufacturer. It is home for the largest motor cycle manufacturer and fifth largest commercial vehicle manufacturer. The industry is producing about 9.9 million passenger vehicles, ' million commercial vehicles, ':.; million two wheelers and about ).; million tractors per annum. The automobile industry has achieved a turnover of < =>: billion and the auto component industry has reached a turnover of < =9: billion. The Indian tyre industry, which is an integral part of the Indian automotive industry, has registered a turnover of almost < = > billion.
Major automobile clusters in India: Halol Pune-Nasik Aurangabad 0 ?eneral !otors 0
