Five Innovations Expected To Revive Auto Component Sector

According to reports, India became the fourth largest auto market in 2019 displacing Germany with about 3.99 million units sold in the passenger and commercial vehicles categories. *

The auto components industry accounted for 2.3% of India's Gross Domestic Product (GDP) and 25% to its manufacturing GDP, providing employment to 50 lakh people in 2018-19. As per Automobile Component Manufacturers Association (ACMA), automobile component exports from India is expected to reach US$ 80 billion by 2026.

Recognising the pivotal position, the auto industry plays for manufacturing in India, the government has undertaken several measures to give a fillip to the sector. Here are the top 5 steps and innovations that will help grow the momentum in the Indian auto sector. 

1. Getting ready to tap global markets

The BSVI regulations which came into force from April 2020, are one of most advanced emission standard for automobiles and equivalent to Euro-VI norms. Indian auto manufacturers have hiked their investments to upgrade existing models to the new standards. With these investments, Indian automakers can access global markets with BSVI compliant products to meet the emission regulations in far more markets than before.  

To support these aspirations, the auto components manufacturers have also ensured that their products match the global standards and quality levels. This will help establish India as a country of choice as a global supplier in this market. 

This disruption can be turned into an opportunity for the Indian auto makers as innovation in these areas will drive a revival for the industry. The focus and incentivization of electric vehicles in India, will lead to Indian suppliers enhancing their capabilities in this segment; offering the same to global businesses as well. 

2. Use of Industry 4.0

The pandemic induced slowdown gave most automakers the opportunity to see what can be done differently to adapt to Industry 4.0. Various Industry 4.0 technologies can help seamless product development and launches with shortened product development cycles. High adoption of connected technologies have led to real time decision making, versatile conversation and hyper personalized virtual factory tools for customers. Companies who have made digital their forte will be preferred in the long term as they generate more value, along with speed and efficiency in the entire manufacturing process. The real-time control and improvements will help reduce wastages. The overall consistency of safety, quality and productivity will facilitate reducing disruptions and overall costs.

3. Collaborate to win together and more

The auto industry is fundamentally a very capital-intensive area; however shortened product lifecycles sometimes raise concerns for return on investments. Manufacturers will need to identify common ground to work together and invest jointly to justify the large investments and returns. This will also encourage OEMs to develop more platforms at better costs and play a facilitator's role. Collaboration between OEMs, suppliers, dealers, and customers on a single platform will help reduce operation overheads, transport costs, product rejection and maintenance costs. With its intrinsic strength, each player can help build an asset lite model, which will reduce the iterative development process and get us closer to the end customer.

4. Flexible working options for hourly workforce 

Non-traditional work hours, locations and job structures can help companies offer flexibility in creative ways without disrupting compliances. This can help them deliver a better work- life balance and increase employee productivity and engagement at work.

5. Partnering with Start ups

Start-ups can bring a fresh and different perspective and be technology partners to come up with intelligent products, solutions, and services. The established and the new will need to work together, to drive the speed with experience, to capture opportunities and emerge victorious. Start-ups bring speed, agility and innovation. Partnering with them allows the larger organization to experiment and learn quicker than themselves and foster an entrepreneurial spirit. 

India’s strong auto value chain is also promoting OEMs to focus on next-generation platforms and solutions. Over the years, the Indian automotive sector has become a dominant force with many companies investing in India to cater to the domestic and export markets. The Indian auto industry can move past the prevailing notions that hinder its global competitiveness by leapfrogging manufacturing and exporting high-quality products. 

As the lockdown eases, with both supply and demand side factors being favorable and the right government incentives, the Indian automotive industry’s path towards revival is on the right track to both growth and evolution.