View from India: Switch gears and vroom to the next lane
The auto industry is seeing exponential growth, and technology is increasingly being integrated to meet emerging demands. Auto giants are seeing this as the next phase of turbo-charged growth, and are quick to grab a slice of the proverbial pie with newer models.
Yet, one thing is certain, regardless of the demands of a new age, certain basics like convenience and efficiency remain the same. Passenger comfort and sustainability are other hallmarks.
Consumer demand will drive the next phase of transformation in the auto landscape, characterised by technologies like the Internet of Things (IoT), digitisation and automation. These technologies will be the platform on which connected cars will be created. Connected cars will offer a solution to the redefined concept of passenger comfort. The accent will be on infotainment. This paradigm shift will create a market for integrated service providers, multi-brand service networks and smart devices. There will be a sharper focus on satellite data, streaming, multimedia devices and cloud-based solutions.
While the connected car is a dimension that is somewhat untapped, the other promising segment is that of car-pooling. That’s because though one may rise in stature and bring home a luxury sedan to reinforce the social status, that doesn’t alter the heavy traffic snarls that one has to deal with while driving.
A relatively unexplored dimension of ‘mobility services’ will emerge. Consumers will rely on shared vehicles much more than before, which will result in increased sales in this segment. This largely fragmented industry will become scalable and sustainable with the emergence of dedicated travel apps for car-sharing or car-pooling. These cars will be booked through smartphones and payments made through mobile wallets. Car-sharing will lower traffic congestion, air pollution and make our cities more sustainable. It will also be a cost-effective means of commuting.
Due to environmental considerations, we will see more of hybrid cars. It’s also got to do with the fact that the National Electric Mobility Mission 2020 stewarded by the Government of India (GoI) offers a Scheme for Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India. Plug-in, battery electric and fuel cell vehicles are all included in the scheme.
As a result, we will see partnerships related to the infrastructure, critical components and allied services required for electric and hybrid vehicles. Design capabilities and engineering specifications will have to adapt to the changing demand-supply needs.
It requires new skill sets and a talent pool along with green manufacturing hubs, smart factories and after-sales services to take it forward. Original equipment manufacturers (OEMs) will align themselves to this upcoming demand-driven market by offering alternative fuel variants.
There can be possibilities of retro-fitment of vehicles and new test tracks for them. Supplier clusters to facilitate movement along the supply chain could spring up in various parts of the country.
Many of the initiatives will trigger start-up ventures, as innovative ideas and upcoming technical capabilities will hit the road. The most important and awaited outcome is that it is hoped to strengthen the Make in India vision.
With this come other business-related aspects like brand positioning, product portfolio and price points, along with outcome-based R&D efforts. Players who want to cater to the commodity curve will use digital and social media marketing along with non-traditional marketing channels for the distribution network.
Let’s hope this opens out a route to an accelerated rise of new economically viable business models in the auto industry.