Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry
In anticipation of rapid growth, the passenger car market in India is crowded with 18 companies trying to establish themselves. Most companies have joint ventures with Indian partners and have entered the market in the last two years. The number of new entrants over a narrow time window of two ye...
| Main Authors: | , |
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| Language: | en_US |
| Published: |
2002
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| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/1631 |
| _version_ | 1826216392908603392 |
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| author | Sastry, Trilochan Mukherjee, Avinandan |
| author_facet | Sastry, Trilochan Mukherjee, Avinandan |
| author_sort | Sastry, Trilochan |
| collection | MIT |
| description | In anticipation of rapid growth, the passenger car market in India is crowded with 18
companies trying to establish themselves. Most companies have joint ventures with Indian
partners and have entered the market in the last two years. The number of new entrants over a
narrow time window of two years is unprecedented. Demand forecasts vary and analysts
expect anywhere between 2 and 3.5 million cars to be sold in the next five years. Equity
holding for the international partner is usually over 50% and they retain significant managerial
control. Most of them have introduced cars in the $13,500 to $33,000 price range, which is
viewed as a luxury segment in India. Automobile companies have also chosen to establish
exclusive dealerships. Initially, companies have chosen to import completely knocked down
(CKD) kits and assemble them in India. However, this strategy is not effective in the long run
since such imports attract 50% duty. The major implications are that a shake out is likely and
that companies would need to have alternate plans, including introduction of cars in other
market segments, lower prices, and exports from India if they cannot establish themselves in
the domestic market. The supplier industry is very small and needs to develop simultaneously
on all fronts including rapid capacity expansion, acquisition of technology, improvement in
manufacturing practices, quality and productivity, adoption of lean manufacturing, and
developing product design capabilities to meet the needs of assemblers. Therefore, a critical
requirement for rapid growth of the industry is adequate assembler involvement in the suppler
industry. |
| first_indexed | 2024-09-23T16:46:35Z |
| id | mit-1721.1/1631 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T16:46:35Z |
| publishDate | 2002 |
| record_format | dspace |
| spelling | mit-1721.1/16312019-04-12T08:09:23Z Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry Sastry, Trilochan Mukherjee, Avinandan passenger car Indian automobile industry international market In anticipation of rapid growth, the passenger car market in India is crowded with 18 companies trying to establish themselves. Most companies have joint ventures with Indian partners and have entered the market in the last two years. The number of new entrants over a narrow time window of two years is unprecedented. Demand forecasts vary and analysts expect anywhere between 2 and 3.5 million cars to be sold in the next five years. Equity holding for the international partner is usually over 50% and they retain significant managerial control. Most of them have introduced cars in the $13,500 to $33,000 price range, which is viewed as a luxury segment in India. Automobile companies have also chosen to establish exclusive dealerships. Initially, companies have chosen to import completely knocked down (CKD) kits and assemble them in India. However, this strategy is not effective in the long run since such imports attract 50% duty. The major implications are that a shake out is likely and that companies would need to have alternate plans, including introduction of cars in other market segments, lower prices, and exports from India if they cannot establish themselves in the domestic market. The supplier industry is very small and needs to develop simultaneously on all fronts including rapid capacity expansion, acquisition of technology, improvement in manufacturing practices, quality and productivity, adoption of lean manufacturing, and developing product design capabilities to meet the needs of assemblers. Therefore, a critical requirement for rapid growth of the industry is adequate assembler involvement in the suppler industry. 2002-09-04T17:23:13Z 2002-09-04T17:23:13Z 2002-09-04T17:23:13Z http://hdl.handle.net/1721.1/1631 en_US 33369 bytes application/pdf application/pdf |
| spellingShingle | passenger car Indian automobile industry international market Sastry, Trilochan Mukherjee, Avinandan Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title | Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title_full | Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title_fullStr | Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title_full_unstemmed | Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title_short | Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry |
| title_sort | entry strategies in emerging economies the case of the indian automobile industry |
| topic | passenger car Indian automobile industry international market |
| url | http://hdl.handle.net/1721.1/1631 |
| work_keys_str_mv | AT sastrytrilochan entrystrategiesinemergingeconomiesthecaseoftheindianautomobileindustry AT mukherjeeavinandan entrystrategiesinemergingeconomiesthecaseoftheindianautomobileindustry |