Report Number

2004-005

Abstract

We focus on the auto industry supply chains in India. The Indian auto industry is small in size, compared to the world markets ($ 6.73 billion compared to a world market of $ 737 billion) but has experienced a growth rate of 20-25 % the past few years. Over 13 Indian companies have won the Deming prize and quality has improved significantly. We focus on empirical data in this industry and explain the seemingly counterintuitive trends such as falling margins, no distinct financial advantage for the Deming firms and, in some cases, declining total factor productivity. We then compare the Indian auto industry to the industry in China, which provides an interesting contrast. We conclude with some insights regarding the future of the Indian auto industry – which is an industry at the crossroads.

Date of this Version

1-1-2004

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