The Indian automotive industry contributes significantly to the economic growth of the country. This adds 7.5% to overall GDP and 49% to India’s manufacturing GDP. New Delhi: Adapting and innovating in an ever-evolving world with challenges along the way is critical for any industry to continue to succeed. Despite the COVID-19 recession and recent supply chain disruptions, the Indian automotive industry is poised for rapid growth by adopting advanced technologies and trends to meet changing consumer needs and preferences. Recorded.
The adoption of electric vehicles, autonomous driving, connectivity and digital distribution, the expansion of the used vehicle market, and intensive technological advances in safety measures are redefining the growth momentum of the industry, driving both urban and rural transport to the next level. has been transformed. These are expected to have a significant impact on the automotive sector in the coming years. India is currently the third largest automotive market in the world and the growth of the Indian automotive market is projected to continue over the next decade.
The Indian automotive industry contributes significantly to the economic growth of the country. This adds 7.5% to overall GDP and 49% to India’s manufacturing GDP. Interestingly, in a difficult situation, India’s auto parts industry grew an impressive 23%, contributing 2.3% to India’s GDP. By 2026, the auto parts export business alone is likely to contribute around 7% to India’s GDP, according to estimates.
EV leads the industry
As India relies heavily on fossil fuel-based energy, the introduction of EVs is particularly important for our economy and its growth prospects. Over the last few years, the Indian government has paid great attention to her acceptance and development of the EV industry, which is manifested in the proliferation of electric vehicles. The government will provide strategic policy support to achieve majority EV penetration by 2030 through programs such as FAME, PLI, tax incentives (direct and indirect) and tariffs at both central and state levels. It offers.
According to an independent assessment by the CEEW Center for Energy and Finance (CEEW-CEF), India’s EV market could grow to US$206 billion by 2030 if India continues to make steady progress towards achieving its ambitious targets for 2030. will create potential. According to another report by the Indian Energy Storage Alliance (IESA), the Indian EV market is expected to grow at a CAGR of 36% until 2026. The EV battery market is also expected to expand at a CAGR of 30% during the same period. Overall, the EV sector is expected to create 50 million indirect jobs and 10 million direct jobs by 2030 (IVCA-EY-Induslaw report). The role of disruptive technology
Among other things, modern technologies such as the Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML) are helping to provide advanced driver assistance, communicate with other vehicles, avoid traffic jams, and prevent accidents. With an expected growth rate of 10.4% from 2021 to 2031, data and telematics are expected to play a key role in vehicle modernization and optimization. The introduction of 5G technology will be a game-changer as it enables wireless information exchange, such as weather and traffic updates, while driving.
Safety becomes the new normal
According to a recent analysis by the Ministry of Roads, Transport and Highways (MoRTH), there will be 153,972 road deaths in India in 2021, the highest number since 2011. The government established a national road fatality count through the MoRTH. Road safety policies make road safety an important part of the overall road planning process. Additionally, automakers are working together to create a clear roadmap for developing key safety features that make vehicles safer.
In India, about 52% of buyers are willing to pay more for safety measures. The addition of six airbags is the first move in this direction, but crash test ratings and other cutting-edge safety measures are also provided to ensure safe design standards. This has definitely increased consumer awareness among Indians. For the industry to thrive, policies must keep pace with technological change.
Growth drivers and opportunities
The Indian automotive market is expected to reach nearly $3 billion in capital expenditures in 2023, showing 24% year-on-year growth. Factors contributing to this growth include a preference for personal mobility, clear and accessible financing options, improved road infrastructure, and the growing popularity of electric vehicles.
Additionally, car companies are looking at ways to ease the car buying process by introducing virtual showrooms. This greatly streamlines sales, reduces infrastructure and overhead costs, and enables retailers to offer competitive pricing and promotions. It gives customers the convenience of purchasing a car through an online platform after a virtual tour, submitting documents online, and finally picking up the car at home with a secure payment method.
New trends and the use of the latest technologies in the automotive sector are opening up huge investment opportunities. Government schemes in the auto and auto parts sector and financial commitments to support manufacturing are not only enhancing local market prospects, but also attracting investment.
(Disclaimer: Nirmal K. Minda is Chairman and Managing Director of Uno Minda. Opinions are personal.)
