This study has investigated the effects of strategic alliances on the performance of small and medium sized enterprises (SMEs) of the industry of automotive parts manufacturers. Questionnaires have been distributed among 400 senior managers of SMEs of the industry of auto parts manufacturers based on stratified random sampling. The data has been analyzed using structural equation modeling software and PLS2 software in two segments of measurement model and structural model. In the first segment, technical features of the questionnaire were tested in terms of reliability and validity. Moreover, in the second segment, t-test was used to test research hypotheses. The results show that there is a significant and positive relationship between the dimensions of strategic alliances, including new opportunities, entrepreneurial and innovative capabilities, social capital, and internationalization of business, and competitive advantage with the performance of SMEs.