The Indian automobile industry has emerged as the 7th largest in the world. According to the Society for Indian Automobile Manufacturers (SIAM), the automobile industry has already invested Rs 70,000 crores in the past four years in building new factories, adding fresh capacity and bringing out new products.
The auto components industry too is gearing up to compliment the vehicle industry’s growth. About $6 billion has been invested in the past 4 years according to Automotive Component Manufacturers Association of India (ACMA). It is driven by a sustained increase in vehicle population and an increasing preference towards higher-end vehicles with rising consumer aspirations (Volvo registered 155% increased growth of its luxury segment in 2012).
According to a recent Automotive industry report by Wipro, in the coming decade, the main focus would be on enhancing efficiency and productivity, and on innovation, driven by changing customer demands. Price sensitivity of the Indian consumer, cost optimization needs of manufacturers and increasing focus on environmental concerns will drive critical changes in the market.
Future strategies of the auto companies will have to focus on increased environmental safety concerns, rising fuel prices and cost-effectiveness in the rising market competition. Innovation has to focus on increasing efficiency and reducing emissions.
Customer experience will be a key factor to retain the existing ones and reach out to the new ones. After-sales service is an important aspect which will help in winning the loyalty of the consumer. Overall in- vehicle experience needs to be upgraded for the consumer by deploying telematics, embedded software and infotainment in a seamless and user-friendly manner.
According to me, in order to ensure long-term, sustainable growth, auto companies will need to focus on adopting a three pronged strategy of - investing in R&D for product development, extending presence to non-auto verticals, and expanding geographical presence beyond the domestic boundaries. OEMs should expand service and distribution networks, manufacturing facilities and improve technological capabilities.
Future investments will need a strong public-private partnership, not only to build infrastructure for growth but also to combat the counterfeit auto parts market.
A clear roadmap, training of man-power and appropriate regulations with clear policies regarding safety & emission norms and fiscal policies are required for long–term planning by the automotive industry. Steps to create an encouraging environment will help in accelerating and sustaining growth and project India as the global hub for the auto industry.