博 士 学 位 論 文

博 士 学 位 論 文

内 容 の 要 旨 お よ び

審 査 結 果 の 要 旨

甲 第 １５２ 号

２０１８ 創 価 大 学

本号は学位規則（昭和２８年４月１日文部省令第９号）第８条の規程による公表を目的として、平成 ３０年３月１８日に本学において博士の学位を授与した者の論文内容の要旨および論文審査の結果 の要旨を収録したものである。

学位番号に付した甲は、学位規則第４条１項（いわゆる課程博士）によるものである。

創価大学

氏

Shahadave Shrestha

学 位 授 与 の 日 付 平成 ３０年 ３月 １８日

学 位 授 与 の 要 件 学位規則第４条第１項該当

創価大学大学院学則第場３１条第２項該当 創価大学学位規則第３条の３第１項該当

論 文 題 目

Development of Indian Automobile Clusters

：Role of Japanese FDI

インドの自動車産業のクラスター発展

：日本社直接投資の役割

論 文 審 査 機 関 経済学研究科委員会

論 文 審 査 委 員 主査 Philippe Debroux

Development of Indian Automobile Clusters : Role of Japanese FDI

Objective and organization of the thesis

The objective of the thesis is to understand the process of cluster formation through agglomeration in automobile industry and the role foreign direct investment (FDI) plays in this process. The automobile industry in India is taken as example and the development of the activities of Suzuki Motors Corporation (Suzuki) subsidiary in that country, Maruti Suzuki India Limited, is used as case study. Michael Porter popularized the concept of cluster in the 1980s when he explained the development potential of geographic concentration of interconnected companies. The Flowchart Model developed by Professor Kuchiki to analyze industrial cluster policy is utilized in this thesis. The model puts emphasis on the role of government leadership in the initial stages of development of the market through building of infrastructure, deregulation and reinforcement of institutions; the importance of growth of both domestic and foreign market through the creation of industrial zones and export processing zones, and the gradual building of capacity and acquisition of core competences by all small and large actors. In this process anchor firms are expected to play a leading role of nurturing related firms, creating the incentives to having them improve their capabilities, and encouraging them to collaborate and exchange best practices.

Clusters are expected to emerge through agglomeration process and grow and evolve through internal dynamics of the market without direct intervention of the state. In this respect Murati-Suzuki is presented as a successful case of anchor firm that was instrumental in the creation of a dynamic industrial cluster in the so-called NRC region where automotive industry was almost inexistent before its arrival. The state played an important role in the success of the venture through preferential treatment and specific tax but the entire project is managed according to market principles without state interventionism in the agglomeration process.

The thesis mainly relies on secondary sources gathered in Japan through literature and interviews at Suzuki and a number of Japanese suppliers. Two case studies of Indian suppliers of Suzuki are nevertheless included in the thesis. They provide information about the relationship between Suzuki and its suppliers in terms of product development, transfer of technology and human resource development.

Then, the thesis also briefly compares the NRC Suzuki-led cluster to the Chennai and Shanghai Auto clusters.

Development of the Indian Automotive Market

India is now the seventh biggest car producer in the world. It is a fast growing market although it remains

much smaller than the Chinese market. Indian automobile industry developed very slowly after the

independence. The market was completely closed to FDI and Indian car manufacturers produced small

quantity of cars under license from European makers for the domestic market. Before the entrance of

Suzuki as partner of Maruti, there were three automakers on the market and combined volume of

production was around 40,000. The Indian government started Phased Manufacturing Program (PMP),

the purpose of which was to ensure that technology was transferred and absorbed in India, and also to limit the outflow of scarce foreign currency in the 1970s. The government believed that once the components were manufactured in India, technology transfer would have taken place and the capacity to make further improvements and design better components would have developed. However, nothing of this sort happened and this policy and other policies which prevented competition led all the products gradually become obsolete. Almost all suppliers produced small volume of parts and components and this volume was even split between two or even more suppliers for each part. This was too small for suppliers to adopt good manufacturing systems and buy high quality tools. The absence of competition, lower volume and quality of production and low priority given to cars in the economic policy of Indian government led to absence of any incentives and opportunities to upgrade technology for component makers and to improve their production system. The use of local components was dictated by their availability, or rather the lack of it. At the time, vendors were not keen to increase their investment costs as the volume of the production of the components and turnover were at levels that did not make investments in developing capabilities viable.

Indian economic and legal system started to liberalize in the 1980s. Then Indian government invited Suzuki Motor Corporation in 1982 as a minor partner with equity of 26%. Nowadays, Maruti Suzuki India Limited is a subsidiary of Suzuki Motor Corporation. The company has two manufacturing facilities in the country and is planning to building a new one. It is at the beginning of the 1990s that deregulation and better market prospects attracted FDI. Many big automakers entered the Indian market since the 1990s. The moves accelerated when government opened up the auto industry for 100% foreign direct investment through automatic route in 2002. GM, Ford, Mercedes Benz, Honda, Fiat, Toyota, Skoda are big names which entered the Indian automobile industry since then. Nevertheless Suzuki is still India’s leading passenger car manufacturer, accounting for nearly 45 percent of the total industry sales.

The thesis analyses in detail the policy Suzuki followed to develop its network of local suppliers and upgrade the quality of parts and components. Suzuki operations developed in the Northern part of India on a greenfield site away from the traditional auto producing areas. Therefore, necessity existed to build up a supplier network which would be capable of sustaining an operation which bought a high proportion of the value of its cars from its local suppliers. It was all the more necessary that under the import substitution industrialization regime, the government required, through its PMP, both foreign and domestic producers to achieve a high level of localization of raw materials and components.

Suzuki pushed for adoption of Japanese standards of quality thanks to comprehensive procedure of manufacturing. The thesis relates the difficulties during the first years of operation. It was difficult to convince the suppliers to invest in new equipment and adoption of new practices such as just in time production process. As a result, the firm was confronted to the inability of suppliers to supply required quantity of component in time during the beginning years.

From its experience in Japan it induced Suzuki to become even more involved with its vendors,

concluding technical agreements and forming joint ventures to manufacture components that were critical

to the quality of the vehicles, or were difficult to transport, or required high technology and large investment. In this line of thought it facilitated the relocation of suppliers within a 100 km radius of its plants. That is a one of the reasons why Suzuki encouraged its suppliers from other states of India to establish manufacturing plants in NCR region. This helped in the agglomeration of the automobile industry in that region as a whole. The two Suzuki’ plants have adjacent suppliers parks where selected suppliers have established supply chains of bulky components such as instrument panels, fuel tanks, bumpers, seats, etc. Nearly 78% of the supplier base by value is located within a 100 km radius of the company. Suzuki has strived to develop stable and close relations with its first-tier suppliers, has equity participation in key suppliers and promoted technical collaboration between its Indian suppliers with Suzuki’s suppliers in Japan. The thesis strongly emphasizes those points and gives examples showing how – in line with the concept of anchor firm of the Kuchiki model - Suzuki is successful in promoting the Indian automotive industry in general, setting a standard for other domestic firms to follow, and also in developing the fabric of SMEs by creating linkages with them as suppliers.

Many local small firms that produced components already existed before Suzuki entered India.

Government policy since the 1960s protected and promoted the Small Scale Industries (SSI). Government provided various incentives such as the allocation of the plots in industrial estates at subsidized costs.

Government had reserved many auto components to be produced only by the SSI sector. This policy of reservation forced car makers - including Suzuki - to purchase components from SSI sector rather than make it themselves. Suzuki’s growth has also encouraged many small-scale entrepreneurs to start business in close locations, taking advantage of such incentives given by government. Although Suzuki now works in a large number of big suppliers the share of SMEs in the total of suppliers remains high.

As for the comparison with Chennai and Shanghai clusters, the following can be said : in Chennai there is no dominant automaker that could be considered anchor firm in the sense of Kuchiki. Component makers are the dominant force in the cluster. The Shanghai cluster shows more similarities with the NCR cluster.

Both Volkswagen and SMC entered as minor joint-venture partners and the same process of progressive agglomeration is noticed. Those two makers have played important role in supplier development.

Assessment of the thesis

The research question is sound and it is well explained in the thesis. The author has shown a sufficient

mastery of the kwowledge of the topic and the choice of the methodology is appropriate. The model of

Kuchiki is utilized adequately. In term of presentation the references and citations are made in a proper

manner. In a general perspective the text is legible but it would benefit from proof-reading from an

English native speaker. Moreover, there are a number of spelling mistakes in the text that have to be

corrected.

The thesis is well structured and the flow of arguments is adequate, although the conclusion could have been more comprehensive and clear in its wording. So, minor change appear necessary. The literature survey covers well the main strands in the research on clusters and agglomeration and is up to date. The information from the literature is effectively integrated in the thesis. The thesis does not introduce fundamentally new elements to the field of cluster and agglomeration. However, it can be seen as a comprehensive, well-documented and well-analyzed case applying the model of development of Professor Kuchiki. In that sense, it covers a gap in the literature in the field. The thesis would have been significantly enriched should it had been completed with a broader and deeper set of local suppliers.

Nevertheless, the two cases provide useful information about the process of development of the cluster and the specific involvement of Maruti Suzuki India Limited.

Evaluation of the thesis

The three examiners consider the thesis acceptable for a PhD degree. They give the notation of 90.