Performance of automakers in China and India: an empirical investigation using ratio analysis

Automakers in China and India are continually increasing their shares of the automobile market by adopting cost leadership strategy. In this study, we examine the operational and financial performance of automobile firms in China and India through a range of accounting ratios. This analysis provides a snap shot of operating and financial performance of Chinese automakers in comparison to one of their main competitors, India. The results of the analysis suggests that despite the public view that Indian automakers are posing serious challenge to Chinese automaker in recent years on the cost competitiveness, Chinese automakers have shown continuous improvement in their performance and out-performed Indian automakers in operational areas. This study identifies some critical factors that Indian automobile manufactures need to pay attention to improve their performance and compete with other automakers who have adopted similar business strategy.