In the post liberalization period, the Indian automobile industry saw the emergence of new players and the birth of competition. The principal issues confronting the Indian automobile industry now are: Low economies of scale, outmoded technologies, absence of global outlook, intense competition and unfriendly government tax policies. The goal facing the industry today is one of achieving a balance between business innovation, technical innovation and liberal government policies.

In an earlier article titled "Where is Indian industry headed" one had looked at the Indian industry as a whole with reference to the Michael Porter model on "The Competitive Advantages of Nations" and concluded that urgent action need to be taken by both the Government of India and industry as a whole if the Indian economy was to be globally competitive. This article takes a look at the Indian automobile industry with the Porter Model as a background to assess its competitiveness in the global arena.

For close to half a century the automobile industry has been a three horse race, Hindustan Motors and Premier Automobiles for cars and Bajaj Auto for two wheelers. Concepts like competition, world-class quality, product development and innovation and customer focus were unheard of in this scenario. None the less than manufacturers did have profitable operations as the entire industry operated in the government-protected cocoon of the license permit raj. Even the advent of Maruti Udyog Ltd., in the mid 80's in collaboration with Suzuki did not significantly change the competitive edge in the industry though it did get in the much needed quality consciousness into the industry.

Indian automobile industry, Post liberalization, business innovation, technical innovation, liberal government policies, Indian economy, Indian automobile industry, global arena, government tax policies, customer focus, business innovation, government-protected cocoon, profitable operations, quality consciousness, competitive edge.