Disruptive tech, sustainability agenda driving India’s auto INC | Autocar Professional

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India is the world’s third-largest automobile market. Regardless of the current softer global economic climate and its inevitable impact at home, the country’s automotive industry is set for robust and resilient growth enabled by disruptive technologies and a sustainability mindset.

The automotive and ancillary industries are anticipated to progress significantly, leveraging well-established manufacturing ecosystems, sustainable practices, dynamic supply chains, and a skilled talent pool. With the support of the public and private sectors, India is also positioned to emerge as the preferred global hub for automotive Original Equipment Manufacturers (OEMs).

Rise of clean mobility

Consumer awareness and conscious decision-making are driving demand for electric vehicles (EVs), prompting increased investments in sustainable and advanced production facilities from automakers. With a mature manufacturing ecosystem, India is poised to contribute to global sustainable mobility solutions, fostering both domestic and international growth in the auto industry.

The electrification of vehicles in India has gained remarkable momentum, surpassing one million EV sales in the first nine months of 2023. Global automakers, including VinFast Auto from Vietnam and Hyundai Motor Company, recognise India’s potential in the EV domain, leading to plans to set up assembly units and make significant investments in the country.

A focus on sustainability has brought green hydrogen as a source of clean fuel under the spotlight. The auto industry is making strides to replace the traditional sources of fuel with the carbon-free fuel. Green
hydrogen for mobility will be a gamechanger for India’s automobile space.

Last-mile mobility leads the way in electrification

Proof of this lies in the fact that the last-mile mobility segment—compromising two-wheelers (2W) and three-wheelers (3W)—is leading the transition towards electric mobility in India. According to the government’s Vahan portal, 5.81 lakh electric 3Ws were sold across the country in 2023. This is second to electric 2Ws, of which more than 8.5 lakh units were sold during the same period.

This is expected to gather momentum in a price-sensitive segment. Lower total cost of ownership (TCO) for EVs coupled with the rising prices of fossil fuels will act as catalysts for the said transition.

Out with the old, in with the new

India’s target and determination to achieve net-zero carbon emissions by 2070 has given rise to a plethora of regulatory policies and mechanisms, which are meant for curbing pollution across all industries. And the automotive industry is no different.

The mandatory scrappage policies for old government and goods vehicles have created a sizeable demand for new cars to take their place. This, along with significant increase in economic activities, rapid urbanisation, and wide-scale infrastructure growth, will enable substantial growth for the country’s commercial vehicle industry. 

Connected by technology

Transitioning to connected mobility, India is on the cusp of technology-based rapid growth. On the EV front, consumers demand features such as range prediction and accessible charging infrastructure. Traditional considerations like engine technology and performance metrics are taking a back seat. Today, consumers seek software-led abilities such as artificial intelligence (AI)-based voice commands, Internet of Things (IoT)-driven connectivity, virtual assistants, in-vehicle access to music platforms, and the supporting feature to multitask while driving. Advanced Driver Assistance Systems (ADAS) capabilities, largely dependent on software, are proving to be crucial differentiators. This shift highlights a clear consumer preference for features setting vehicles apart in the market.

The rise of gigafactories, particularly in the four-wheeler EV segment, indicates a growing interest driven by consumer demand and the public transportation sector. To enable this interest, the government has greenlit plans to deploy 10,000 electric buses across 169 cities in the next decade. This includes investing nearly US$7 billion in India’s EV charging and associated infrastructure facilities.

Paving the way forward

Historically, the industry may have been cautious in integrating new technologies, but it has shown interest in adopting innovative solutions to improve productivity, efficiency, and product quality. For instance, Generative AI is being used to develop conversational user manuals, analyse the market, and manage customer interactions. In this rapidly-changing landscape, success will depend on the ability and flexibility to adapt and innovate.

Anuraag Bharadwaj is the Vice President and Industry Platform Leader for Automotive – India, Capgemini. Views expressed are of the author. 

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