Going forward industry to see consolidation & JVs
Telematics Wire interacts with Sanjay Dhar, Director & Country Engineering Head, Elektrobit on the issues and challenges which the automotive industry in India would face during and post pandemic COVID19. Below are the excerpts from the interaction:
- What is the impact of the slowdown in the automotive industry for technology developers and integrators?
The automotive industry across the world is in the midst of a transformation. Vehicles are seeing more software content being integrated into them. Connectivity is a common feature among cars and other vehicles, which means the scope for technology developers and integrators is massive.
While the slowdown has affected the industry across the board, we must remember a major evolution is happening, and this requires time – for all stakeholders to align to a change. As technology developers, we see this as another opportunity to innovate and grow. The R&D continues at the same pace, and we look to the future where we can bring in more technologies
- What do you expect as short term impact on business/industry?
From an industry perspective, these are unprecedented times. April 2020 recorded nil sales for the first time in history. This was also a critical transformation time, where BS VI norms should have commenced from 01 April 2020. Some of these deadlines have been pushed back, so the industry is reconciling with the ‘new normal’. The slowdown could mean that the implementation timeline of some technologies could be delayed but R&D still continues at a strong pace. As the industry recovers, we will have newer technologies ready to deploy as and when the markets are ready for it.
- Do you foresee any change in consumer behavior in near term?
The consumer in India, and across the world, is becoming more discretionary. Cars are no longer viewed as just transportation devices. There is a whole lot of comfort and personalization involved in a vehicle. We will see a higher demand in customization in the near-term, where a consumer might choose for a certain set of features only. For eg. we might see an uptake on features that are health related, no touch based systems (voice, actions, haptics). This behavior will continue to evolve over the long-term, where a host of optional features will be offered by OEMs. Overall consumer expectation will be all about what feature rich product you get for a given price range.
- Will there be any shift in direction from electric and shared to something like small and self-drive for the millennials?
While the startups in the electric mobility space are finding it extremely challenging to survive due to cash crush and lack of financial support in such extraordinary and unprecedented times, we do not foresee any impact on the demand for the electric mobility as the attention is currently on building sustainable mobility – which, for now, means electric. Going forward social distancing will become a norm and hence people would prefer private transport against public or shared transport. Hence there could be an increase in demand for small cars and two wheelers which could potentially have an impact on the shared mobility.
- What can hasten the pick-up of this automotive industry?
As markets begin to recover and disposable incomes increase, we will see a growth in the automotive industry as well. The entry of newer features, a range of electric vehicles will also give the customer a range of options that suitable for the future as well. Industry policies will have a great deal of impact too, especially on the topics such as unsold stock of BS IV vehicles and the proposed scrappage policy.
- In the absence of any government support how can industry play a role in automotive industry get back on track?
The industry is well represented by associations such as SIAM, ACMA, and other related bodies. These associations have a vital role to play in setting a structure for the industry to follow and negotiate with the government too.
- Impact of Coronavirus outbreak on businesses for Telematics Service Providers in India?
We believe that while there might be an impact in the short term however, we do not foresee any impact in the longer run as demands for telematics services will only increase. The buying pattern of the consumers suggests that they are inclined towards new products/ features (sale of MG Hector and KIA Seltos are case in point). Moreover, the demands for health, safety and distancing related features might see an increase in demand.
- Do you think there will be opportunities that connected vehicle will create post corona pandemic?
Connected vehicles are the future. Connected vehicles offer more safety and comfort features and have already been in high demand. Most new cars on the road have some elements of connectivity.
We could expect this to grow further, as this could enable more options for contactless interactions between humans and surrounding infrastructure, humans-to-humans and enhance comfort and safety levels in the post-COVID world.
- What will be the strategy from survival to revival for automotive, CV, AV, Telematics, suppliers industry etc., post COVID-19?
We will see consolidations and formation of JVs going forward that will play a pivotal role in fueling the revival.
Article published in Telematics Wire