High labour, fuel and raw material prices are eroding India's cost competitiveness in the automobile sector as compared to countries like China, the Assocham-Thought Arbitrage report said.
"India loses out to China, Singapore, Indonesia and even to Bangladesh when it comes to achieving cost competitiveness in the automobile and automobile components industry in terms of major parameters like labour, fuel cost and price of raw material," said the study.
It noted that compared to China, Indonesia and Singapore, India spends heavily on raw materials for manufacturing automobiles and components.
It also said that Indian auto and auto components industry has high labour costs than Bangladesh, Indonesia and China.
"In case, we have to realise the 'Make in India' and attract lot more FDI, we need to work on reducing the cost of production in all the parameters, especially at a time when the world demand is subdued," it said.