India among the major emerging markets with robust domestic demand and adequate local production (4 large auto manufacturing hubs across the country) is expected to be the 4th largest automotive market by volume this year. The sunrise sector, contributes to 7% of the country’s GDP by volume promising 6 Million-plus vehicles to be sold annually, by 2020. Over the next 20 years, India will be a part of the big global automotive triumvirate. Global car majors have been ramping up investments in India to cater growing domestic demand whilst leveraging India’s competitive advantage to set up export-oriented production hubs.
Over the years the industry has transformed in to a very powerful and sophisticated domain making the ownership of automotive more appealing to the consumer and the industry very attractive to the stakeholders. Developments have been observed at vehicular level, industrial level, supply level, policy level, interface level, consumer level and so on. Within the automotive manufacturing industry today, the major challenge has been increasing product variety and shortening product life cycles. While the automotive product is a complicated function of functionality, performance, quality, aesthetic, consumer preference, technology, newer generation (Gen Y) consumers etc. the degree of complexity has only increased, especially with intervention of electronics / information technology.
Some of the key trends that drives the transformation in this industry are – social, economic, environmental, technological, political and infrastructural. Of these, technology is considered as an influential driver as it has the capacity to offers solutions to meet the social, economic and environmental goals. Next, political and infrastructural drivers have to support the technologies offered by the industry. The Indian automotive sector have been increasingly focusing on a variety of technology areas like engine / powertrain technologies, hybrid and alternate powered vehicles, intelligent electronics, software & telematics technologies, advanced structure & material technologies, advanced design and manufacturing processes & systems etc. Further, high quality has always been an innate need and a leading operating priority in automotive industries which also is also the key orientation towards most advanced and sophisticated technologies.
Core competencies for advanced R&D in the country are being developed in many areas for cutting edge technologies and to converge the country’s inherent and widely acclaimed IT expertise with automotive engineering. Globally, Japanese and European corporations account for 76 percent of R&D spend in the Automotive vertical, with North America contributing 20 percent to the Global share. In India, this vertical is positioned for growth with several corporations planning an increase in headcount and ramping up capacity within the country.
Government interventions have been a major driving force for development of the automobile industry in various phases of the transformation. NATRiP and Automotive Mission Plan (2006-2016) are some of the prestigious initiatives of the Government to spear head the automotive growth. These projects / initiatives have enabled the industry to adopt and implement global performance standards by extending the focus on providing low-cost manufacturing and product development solutions. We also observe industry bringing in global veterans/experts on management boards and more private players keen to set up an R&D base in India. Yet more design, valuation and testing centers are expected to be set up to support the industry. The Government is taking every steps to make this sector strong and progressive. Attempts are made in possible ways to match the industrial expectations to keep the Indian automotive industry in pace with the global markets.
But it is essential to understand if the R&D efforts are focused on the right areas in the best way possible. On one side efforts are being done in large ways to correlate fuel efficiency and climate change action and measures are undertaken to mitigate the impacts. This is supported by results of technology studies around the globe which states that IC engines will be the powertrain backbone even for the time beyond 2020 and hence optimizing of combustion systems will have invariable importance. On the other side, experts mention that it is time the automotive industry shows the same drive towards the disposal chain as it has done towards the supply chain, the events which happen after a car or motor cycle reaches end of useful life. Further it is also mentioned by experts that R&D efforts today has the spread but needs more depth to strengthen technology and innovational capacity of industries and the nation. Therefore, our research focus areas have to be assessed / evaluated, compared with the global focus and re-aligned if necessary to realize our automotive goals both in the medium and long term.
Overall, India has the potential to become the R&D hub for the global manufacturing industry. It is important to account the impact of green and mobility revolutions which is expected to influence and shape the future Indian automotive industry. Therefore more efforts are expected from the government (political legislation, infrastructure etc.) as well the consumers (price conscious) to gain more momentum in the move to cleaner vehicles, as we understand that major automotive players have the capacity to offer clean vehicles and are awaiting for better scales and supporting infrastructure to make larger moves in this market. In spite of growing mobility concerns, we understand from studies that the socio-economic statement of car ownership will continue to make private vehicles desirable and hence the automotive industry will play a predominant role in addressing the mobility needs and gaps.
With issues, challenges and opportunities, it would be unarguable that the industry and stakeholders will have break through targets in the automotive journey in the years ahead. Hence, it is in our interests to understand the correlation between these major factors, where the nation stands in view of automotive research, what has been done, if any areas has been missed out and our action points for the coming decade to make the transition positive, smooth and profitable. Within our existing framework it is also necessary to create a knowledge transfer network for the automotive industry, a collaboration between industry, academia and government, for creating a ‘technology road-mapping’ initiative which shall support in providing inputs for ongoing investment in research partnerships and to focus efforts on achieving sustainable wealth creation and quality of life.
These have been the background for the Tamil Nadu Technology Development & Promotion Center of CII to organize the 7th Edition - Conference on Automotive R&D Trends on 13th March 2015 with the theme ‘Towards Strengthening Indian Automotive R&D’. The forum serves to understand from the major stakeholders the expectations, challenges and issues which are most likely to have the greatest impact on the long-term profitability and productivity of the Indian automotive sector. It aims to understand the current scenario of automotive R&D and how the growth trends has to be, in order to realize the automotive futures. The conference attempts to project the future of the Indian automotive R&D in comparison with Global Level and bring in stakeholders views for matching this growth with the global standards.
With the Automotive Mission Plan II for the period 2016-26 planned to be finalized by mid-2015, the conference falls in an ideal time to share the industrial views on provisions and policies for automotive R&D and other major components relative to the growth of the automotive sector.