Determinants of Indian Automobile Industry Growth

Abstract

The paper attempts to identify the most influencing factors determining automobile industry growth in India. The paper takes into account a 19-year time period from 1998 to 2016 for 12 firms belonging to the automobile industry in India. The SCP model is used as a framework for examining the performance of the automobile industry. Unlike, the previous studies that are mostly time-series or cross-sectional analysis, the present study employs panel data analysis to measure the impact of selected determinants on automobile industry growth. The paper finds that labour and capital productivity, promotional measures, import intensity, fixed asset turnover, net profit margin and age of the firm as significant determinants of
automobile industry growth in India. Further, the findings help to justify the impact of industrial policies on the growth of the industry during this time.