Since 1980, Indian economic policy has been showing a tendency to shift from 'regulation' to 'liberalization'. Under the regulatory policy until 1980, the Indian Government directly controlled economic activities by applications of 'Industries (Development and Regulation) Act' and 'Industrial Licensing' system. The introduction of these regulations in this period had resulted in few numbers of licensed companies in each segments of automobile industry. Motor vehicles' markets had been oligopolic situations as well as parts and components' ones. Most of automobile companies failed to improve their manufacturing techniques and advance the performance of their products. Automobile industry, as well as other ecnomic sectors, lost competitiveness in the international market in terms of the price and the quality of their final goods. In order to find a way out of above economic dificulties, the Government has changed her economic policies toward 'liberalization'. Licensing control and other restrictive/protective policies have performed poor responsibilities for Indian industries. Then, not only for domestic companies but also for foreign ones, it has been easier to establish new enterprises in almost all the fields of economic activities. According to the liberalization of the post 1980, Japanese automobile companies have collaborated with Indian enterprises in establishing new firms to produce modern motor vehicles. Up to 1990, eight Japan-India joint ventures were founded on all the segments of autombile industry, except for commercial vehicle. On the other hand, existing auto firms in India have tried to innovate their production processes due to introduction of foreign technology. As a result automobile production has rapidly expanded in number since 1980. Japan-India joint ventures adopted the Japanese management system to reduce production cost and to make Japanese designed vehicles. As the degree of the adoption basically depended on their capital composition, so there were some different ways between them. In the light of spatial allocation, we could find following tendencies. Headquarters of them were located in the Capital (Delhi), State Capitals (Madras, Hyderabad and Chandigarh) and other large cities (Pune and Indore). But their factories were founded on the outskirts and remote places for the reason that new location of facilities was restricted in underdeveloped areas by the Government. In this case, they could obtain some advantages, for example government subsidy, tax exemption, cheap labor forces and so on, while there were also some difficulties to operate factories. First of all, few ancillaries were able to produce automotive parts. Assemble factories have owed the supply of components to the existing agglomerations of automotive industry (Delhi, Bombay, Pune and Madras). The distance of transportation was too much long (500-2,O00km., needed 7 days at most) to adopt 'just in time' system with other evil factors, for instance poor infrastructure, differentiations of the way of commercial trade and the quality of labor forces between Japan and India. In Pitanpur, which is situated in 'No Industrial District' of Dhar District, Madya Pradesh and about 30km. away from the nearest city (Indore), the State Government have been developing an industrial growth center to accumulate automobile industry since 1983. The total land in this project is 1,960 ha., 1,372 ha is allotable land and the remaining land has been kept for roads, culverts and other amenities. Up to 1990, 62 large and medium size facfories and 554 small ones were located in the industrial estate, including some facilities under construction. We could find four automobile factories (two Japan-India joint ventures, two indigenous ones) which have took on approximately 3,000 workers in total. With the foundation of them, a
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