Though Information Technology (IT) has offered many benefits to enterprises all over the world, its adoption by Small and Medium-sized Enterprises (SMEs) in India remains relatively low. The auto ancillary industry is one of the key growth drivers of the Indian economy and is rapidly becoming a hub for many of the global and Indian auto majors. Although there is a wide spread use of IT in different areas of business since the 1960s, IT adoption in Indian auto ancillary SMEs has lagged behind its global peers. The non-adoption of IT by auto ancillaries is a major constraint for improving organizational performance and business productivity. This study aims to identify the determinants of adoption of basic information technologies. A survey was carried out in 85 auto ancillaries throughout India. The findings show that lack of financial capacity, lack of in-house IT manpower and small-scale operation are the major determinants which cause the low rate of basic IT adoption among auto ancillary SMEs in India. At the same time, perceived benefits, perceived competitive pressure and awareness of changes in business environment are motivating the firms to adopt the basic information technologies. The paper is concluded with implications for practitioners.

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).

Information Technology Journal, Basic IT Adoption, Auto Ancillary SMEs, Small and Medium-sized Enterprises, Information Technology, Global Peers, Original Equipment Manufacturers, Automobile Manufacturing Sector, Enterprise Resource Planning, Supply Chain Management, Business Operations, Financial Resources, Online Data Access Technology, Conceptual Research Model, Business Environment, Globalization.