Title: Policies for sustainable growth of the SMEs: a study in Indian automotive component manufacturing industry

Authors: Chandra Mouli V.V. Kotturu; Biswajit Mahanty

Addresses: Department of Mechanical and Industrial Engineering, College of Engineering, Majmaah University, Al-Majmaah – 11952, Saudi Arabia ' Department of Industrial and Systems Engineering, Indian Institute of Technology Kharagpur, Kharagpur – 721302, India

Abstract: In automotive manufacturing industry, a majority of the component manufacturers are small and medium sized enterprises (SMEs), who supply parts and assemblies to the original equipment manufacturers (OEM) on contractual agreements. In recent years, with rapid technological advancements in manufacturing and the entry of transnational corporations (TNCs) in the automotive manufacturing industry, component manufacturers are not able to meet the expectations of the OEMs and are struggling to stay in the value chain. As a result, growth of these enterprises is slowing down. In this research work, a questionnaire survey was administered among automotive component manufacturing SMEs, who supply components to a TNC in India. Using a resource-based view strategy, a dynamic simulation model has been developed to study the performance behaviour of the SMEs and formulate policies for their sustainability. The results show that in the existing scenario, the SMEs would fail to supply the desired products and would not be able to sustain their growth without building technological competence and retraining of the staff. There should also be adequate level of support between the TNC and the SMEs for building technological competence of the SMEs.

Keywords: Small and medium enterprises; subcontracting; Indian automotive industry; system dynamics; policy study.

DOI: 10.1504/IJBCRM.2019.100407

International Journal of Business Continuity and Risk Management, 2019 Vol.9 No.3, pp.199 - 225

Received: 28 Feb 2018
Accepted: 29 Sep 2018
Published online: 28 Jun 2019 *

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