Impact of Relationship value dimensions on Purchase Enhancement in B-to-B Markets – An Analysis from the Supplier Perspective in the Automotive Industry

Author

R.K. Gopal

Abstract

There is considerable talk about India becoming an automotive component-manufacturing hub in the near future. Today, the auto component industry is a very vibrant industry of the Indian economy. It plays a crucial role in the automobile sector. Globally, the auto industry is primarily into outsourcing, and the trend is reflected in India too, which has led to proliferation of ancillary units in India. The prospect of exports from India is bright on account of its cost advantage. However, firms face tough competition from Malaysia, Taiwan and other south Asian countries, which have cost advantages on the basis of labour cost, productivity, larger volumes and after-sales service (Dr K Momaya et al., 2005).

The industry is scale sensitive and hence, larger volumes are needed for cost effectiveness and improving quality. The industry is also capital and labour intensive. The players should set up capabilities, adopt new technologies and deliver quality standards to meet the global requirements of components or parts.

Enhanced purchases from automotive OEMs (Original Equipment Manufacturers) are an important aspect in which the automotive OE supplier will be interested. Purchase enhancements are dependent on the tangible and intangible value in the form of benefits received from the supplier.

This paper is an attempt to understand the relationship value dimensions, which affect purchase enhancements. The research is based on the buyer’s perspective. A survey of automotive manufacturers based in southern India was selected for the study.

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