Partnering with automotive manufacturers across the globe, Creative enables them to focus on delivering innovative products and growing their business seamlessly.
While the Indian automotive industry has faced many recent challenges, including the devastating COVID-19 pandemic, its growth potential is crystal clear. India is currently the fourth largest automotive market. Rising middle class income and a huge youth population is resulting in strong demand for vehicles. In June 2022 alone, the total production of passenger vehicles, three wheelers, two wheelers, and quadricycles was 2,081,148 units. In fact, the sector is expected to account for 65 million new jobs within India by 2026 as companies increase production.
Safety, electrification, and IoT are expected to dominate the passenger vehicle market. Particularly, safety owing to the new Bharat NCAP Rules that will fall into place in April 2023. With the push for electric vehicles, electric two-and three-wheelers (E2Ws, E3Ws) and heavy commercial vehicle (PVs and HCVs) sales are expected to skyrocket in India. McKinsey estimates that the sales of new E2Ws and E3Ws could grow to 50 percent and 70 percent, respectively, by 2030. This puts India ahead in a unique position to be a leader in the shared mobility space, providing opportunities for electric and autonomous vehicles.
Dr Mukesh Gandhi, the force behind the recent strides that the Creative Synergies Group has taken, believes that for Indian automotive manufacturers, customizing their unique starting points, capabilities and addressing existing challenges requires continuous technological innovation.
In Special Chat with SME Channels, Dr. Mukesh Gandhi, Founder and CEO, Creative Synergies Group, discusses the key technological disruptions overtaking the Indian automotive industry at present; the major growth drivers behind the Indian EV market; the support needed by Indian automotive OEMs; how Indian OEMs can adopt emerging techs; and much more. Edited Excerpts…
What are the technologies disrupting the Indian automotive industry?
In the last decade alone, businesses adopting new automotive technology attracted more than $400 billion. Out of this, 25% of the investment was ushered in post pandemic. Given that the pandemic caused a surge in digitalization rates across sectors, the potential of the sector increased since the adoption of new technology.
The Indian auto-industry is governed by technology, regulation and consumer behavior. At present, there are over a million EVs on Indian roads. With the ongoing government and private sectors’ investments in the industry, the number will only increase in the coming years.
This paves the way for Indian businesses to invest in disruptive automotive technologies such as improved batteries and swapping/charging, fuel cell technology, collision detection, metaverse showrooms, last mile delivery/distribution and an enabled ecosystem. In the coming years, companies will also find themselves investing in advanced technologies enhancing braking systems, lane departure systems, and fatigue detection systems.
While these technologies make vehicles safer, futuristic and sustainable, the future of the automotive industry is headed towards transforming passenger experience. Vehicles are poised to be more responsive, have advanced climate control features and turn the infotainment aspect up a notch without compromising on road safety.
Why is India poised for a massive growth in the EV market?
At the Conference of Parties 26 (COP26) summit, India committed to the goal of having at least 30% private EVs on road by 2030. Two primary factors driving this commitment are 76% surge in India’s crude oil import bills and the rising pollution across cities.
2022 also witnessed a 48% increase in EV sales compared to 2021. Concerns revolving around charging infrastructure, battery swapping and long-term costs are set to dwindle down in the coming years with the country’s investment in hydrogen fuel cell batteries and local lithium extraction.
The government’s Automotive Mission Plan 2026 aims to nudge India towards the top three of the world in engineering, manufacture and exports of vehicles and components. These ongoing efforts provide an incentive for businesses and investors across the country to drive growth in the EV industry.
Is India catching up too late in the sector compared to the rest of the world?
While Indian roads are plagued by problems like potholes, jaywalkers, stray animals, among others, its automotive sector is on par with, if not ahead of the rest of the world on several parameters. In fact, India has exhibited a steady growth rate even when compared to China, the world’s largest lithium refiner.
India is the fourth largest automotive market in the world and its sales were the strongest in APAC in 2022. The only aspect where the country can buck up at present is research and development to improve its technology. However, collaborations with deep-tech vendors can help businesses amp up their technological capabilities.
The automotive components industry is set to witness to witness significant growth in 2023 and beyond. The factors influencing its growth are increase in sales of passenger vehicles, recovery in sales of commercial vehicles and demand from after market segment, to name a few.
What kind of support can Indian automotive OEMs benefit from?
MSMEs contribute to one-fourth of the Indian auto-component industry’s revenue. Considering the ongoing push for technological innovation in the industry, businesses regardless of their size will have to not only adopt new technology but also make it their own.
What Indian OEMs can benefit from is technological expertise, building, guiding and ensuring that their products stand out in the market. The sector holds tremendous scope and by pioneering with cutting-edge innovations, businesses can leave a long lasting mark.
However, aspects such as technological research and development often take the hit during budget allocations. While it is true that several businesses may not have the resources to invest in hiring a team of technologically skilled professionals, outsourcing support is always an option worth considering.
By trusting a next-generation technology provider to bring their ideas to life, companies can reduce their overall costs and supply high-quality products. This type of support can benefit Indian OEMs in the long run, setting their innovations up to receive international recognition.
How Indian OEMs can adopt emerging technologies in a cost-effective manner?
Indian OEMs have a sea of opportunities ahead of them. In an emerging market, there are endless possibilities of going against the grain, experimenting with ideas and developing innovative products. And it is entirely possible to do so without going over budget.
For instance, automotive OEMs can make design-driven cost decisions. Employing such measures can help manufacturers identify critical features of their vehicles that consumers value and eliminate aspects that aren’t necessary. This approach can also help reduce the time to market.
Localizing design, deploying cost efficient materials and processes, using reusable transport packaging, and optimizing supply chain costs can also significantly reduce the costs. Indian OEMs can adopt lean manufacturing, which is the method of introducing cost reductions gradually while implementing simultaneous solutions.
These methods can free up bandwidth for technological adoption, which can be supplemented by consulting proven deep-tech vendors who can reliably and efficiently deliver outstanding results. Adopting digitalization at each step may be an investment at first but reduces expenses long term. It’s unrealistic to expect that every auto-OEM will have technological expertise and innovating using the business’ budding revenues is not ideal. Many things could go wrong without the right professional expertise.
Creative Synergies Group has been partnering with automotive manufacturers across the globe for over 11 years. We do the technological heavy-lifting which enables them to focus on delivering innovative products and growing their business seamlessly.