The Need and Effectiveness of Research and Development in Indian Automobile Industry: A Comparative Study of Maruti Suzuki and Tata Motors

Indian Automobile industry is the sixth largest industry of the world in the production of vehicles (OICA 2013). After the policy of liberalization, many global players have entered or are planning to enter in the Indian automobile industry. The major attractions for these players are cost effectiveness, favorable demographic factors, increasing aspirations of the consumers and very less vehicle penetration. The competition in the Industry is increasing and key of competition is to improve the vehicle according to the need of the consumer. So the importance of the research and development has increased in the recent years in the industry. The present paper analyses the need of the research and development expenditure in the Indian automobile industry and compares the effectiveness of the research and development expenditure of the two major firms in the industry i.e. Maruti Suzuki and Tata Motors with the help linear regression model.