The Indian automotive industry is one of the fastest growing industries in the
world today. Almost all the global automobile manufacturers have set up their facilities
in India taking the level of production of vehicles from 2 million in 1991 to 1.10 billion
in 2010, growing at the rate of 12% per annum. The automobile manufacturing
sector, which involves assembling the automobile components, comprises two-wheelers,
three-wheelers, four-wheelers, passenger cars, light commercial vehicles, heavy
trucks and buses. There are about 500 auto ancillary units under the organized sector
in India that manufacture auto components. Most of the units come under Small
and Medium-sized Enterprise (SME) categories. In the domestic market, the auto
ancillaries supply auto components to vehicle manufacturers, state transport undertakings,
railways and replacement market. A variety of auto components are
exported to Original Equipment Manufacturers (OEMs) abroad and after-markets worldwide.
Recently, there has been a shift towards relocating the automotive industry to Chennai,
Pune and Gujarat, as these places offer better incentives and serve as better shipment
hubs for exports. Indian auto ancillaries need to strive hard continuously to increase
their efficiency, quality and productivity to develop competitive advantage for
global competition.
In the present era of Information Technology (IT) and globalization, acquiring
IT to support business needs is a crucial prerequisite for exploring the potential of
IT tools. Many studies show that SMEs are the driving engine of growth,
employment creation and competitiveness in domestic and global markets. They also play
an important role in innovation and productivity growth (Blackburn and Athayde,
2000). It is important to adopt IT especially in small to mid-sized businesses to improve
process efficiency and be more competitive. In this, IT is enabling the firms to integrate
with their global and domestic customers and suppliers. Unfortunately, IT penetration
into the SME segment continues to lag behind in India compared to other countries. It
has been observed that research work has not been done to study the factors
determining IT adoption in auto ancillaries particularly. In order to increase IT penetration, it
is important to understand the IT adoption challenges faced by the SME
segment (NASSCOM, 2009). |