Future Of The Automotive Industry Post COVID-19

Dayanand Acharya Nov 24, 2020

The Indian automotive landscape is embracing continuous transformation, influenced by connected technologies, advanced safety systems, electric drivetrain, new models of mobility-as-a-service, etc. The changes are essentially fueled by the introduction of new automotive policies in the last five years, such as the safety legislation and emission norms that bring us at par with global regulatory standards. In my opinion, COVID-19 is a temporary disruption, which requires some realignment in timelines and fine-tuning of strategies to accelerate and catch-up post-Covid-19.

2-Wheeler Segment in India

The demand for personal vehicles surged post the lockdown, as more people prefer to invest in personal transport instead of depending on shared mobility. While this puts shared mobility as a trend on the back burner, it does give rise to numerous other opportunities.

The 2-wheeler segment has been the most popular in India, the most affordable form of personal transport. The past couple of years have seen new legislation ensuring a safer ride, and improving infrastructure, aiming to reduce fatalities. ABS was made mandatory from April 2018 in 2-wheelers above 125cc.

However, we also need to focus on the segment under 125cc, which accounts for over 70 percent of total industry sales. This segment will also see an increased demand for safety technologies and will require more value-driven options to ensure the price point is balanced with the volumes.

Given the growth of the 2-wheeler segment in India, there is scope for introducing newer technologies like blind-spot detection, traction control, and optimized curve braking. While these might be considered as premium features in developing markets, a low-cost version can gain popularity in India.

Passenger Cars

The passenger vehicle segment is also witnessing a slight rise in sales over the last few months. While the industry is divided on the sentiments related to this trend's stickiness, the consumer demand for vehicle features is on the rise - more connectivity, more comfort, more safety, more convenience, and more efficiency.

Consumer awareness over the last few years have bought in a host of technologies into the vehicle. A car is no longer viewed merely as a mode of transportation. It is a personal device and is expected to be safe and comfortable. The recent safety legislation has been a key driver in adopting safety features, which was once considered a premium add-on, now is part of the car as the standard fitment. Airbags and ABS in cars are now a mandatory feature, as stipulated by government policies. While in India, ADAS is still in the nascent stage of widespread adoption, the technologies will soon join the list of mandatory features in vehicles - driven both by regulations and consumer’s demand for more comfort and assistance during driving.

ADAS features have become common in luxury vehicles. However, in the past few years, some ADAS features like cruise control, assisted parking, and adaptive lighting have become a part of the standard package in premium cars as well.

In the near future, Indian passenger vehicles will see a growth in more features such as collision warning, automated emergency braking (AEB), lane departure warning being introduced in the premium segment, helping prevent accidents.

Automotive R&D

Covid-19 had rather accelerated the developments in the automotive sector, as the timelines and milestones for new feature introduction and new regulation deployment remained unchanged. India is one of the biggest hubs for global automotive engineering, remained highly engaged while the lockdown in global markets triggered to move more responsibilities to their captives and offshore engineering centers across India.

The Way-forward

In conclusion, while COVID-19 has created a temporary disruption in the automotive industry, the trend remains consistent towards connected, safety, and electric. These trends have also created a need to scale-up our R&D efforts to deploying technologies more affordable and packed with performance. Additionally, the technologies produced on a mass scale will benefit from increased localization, impacting the overall vehicle price point positively.