Buying needs in automotive space are influenced by a multitude of factors that go beyond product development. JD Power has been successfully conducting market research on vehicles across segments and has been providing consulting services for better assessment of the automotive sector. Auto Tech Review recently caught up with Kaustav Roy, Regional Director – Two wheelers and Automotive Industries; Shantanu Majumdar, Regional Director – Four wheelers; Jacob George, Vice President & GM – Asia Pacific and Darren Slind, Vice President – South Asia, ASEAN and Oceania (L-R), to discuss the current trends in the domestic and global automotive segments as well as the road ahead for futuristic technology.
CURRENT SAFETY PARAMETERS
Given the on-road fatalities witnessed in contemporary times be it two-wheelers, four-wheelers and commercial vehicles, safety has emerged as a big concern. Many OEMs are focusing on improving the road and driving conditions. A case in point is the implementation of ABS and the mandate for at least driver side airbags becoming a standard across all variants. These safety features were earlier found on high-end vehicles or in top-end variants of most cars. Similarly ABS is being adopted in a big way for two-wheelers.
However, at the global level, any adoption of safety norms is governed by policy regulations. “India is moving towards better safety regulations with the government keen to put in place more stringent vehicle safety norms in the coming years. OEMs are also geared up to introduce these features because globally such norms are already in place and most vehicle platforms today allow easy integration of additional features,” said Roy.
This will not be a big leap of faith for vehicle manufacturers, but the challenge lies in keeping a tight rein on incremental costs. The available infrastructure and driving discipline need to be in line with the safety features introduced. For example, in a collision avoiding system, the technology must be calibrated as per Indian road conditions, or else the system will beep continuously given the congested driving conditions.
A large chunk of the two-wheeler population still primarily uses vehicles for commuting, given the dismal state of public transport in semi-urban and rural areas. Of course, the scenario is different for the Tier 1 or metro cities in India, but then it only represents a miniscule proportion of the total commuter population. “There is a growing trend among customers to try out more stylish, powerful and technology-equipped motorcycles. This has resulted in faster adoption of innovative features by OEMs, as the increase in purchasing power warrants such a move,” said Majumdar.
The other trend is international bike makers like Harley-Davidson, Triumph, Ducati and Kawasaki foraying into the domestic market. These products require a certain understanding of riding techniques, and a degree of maturity in handling. The fact that these companies are seeing an increase in their sales clearly indicates that the Indian two-wheeler is gradually moving towards the higher end of the biking spectrum. Concepts such as leisure riding, touring and adventure riding are catching up across age groups, thus opening up newer avenues for OEMs.
The automotive industry has fared well, in terms of quality parameters. The problems faced by consumers regarding their vehicles have come down over the last three years. Indian manufacturers along with global players operating here, have the potential to manufacture world-class products and have been doing so for quite a while now. The increasing number of exports is a testimony to this, Roy said.
CHANGING CUSTOMER PERCEPTIONS
The perception of customers has positively changed over the years. Young buyers today are more sensitive towards their needs and are hence more demanding when it comes to product quality and the features offered. This also has to do with improving product quality across segments over a period of time and given the high aspirational value attached to two-wheelers, it is natural for customers to demand a certain level of quality from their purchase.
Product perception has improved, but Roy mentioned that it is difficult to completely negate customer issues. A two or four-wheeler is a machine and may face breakdowns and failures occasionally. However, with OEMs becoming more sensitive towards the needs and demands of young buyers, these problems and quality issues will come down and plateau off significantly in the years to come.
Buyers today are more critical towards a product purchased and this results in a constant demand for better quality. Vehicle manufacturers have been constantly collecting and processing data from existing and prospective buyers and leveraging it to improve their backend activities, in terms of product design and engineering. This has ensured higher levels of manufacturing prowess, thereby inching closer towards zero-error products.
PERFORMANCE ENHANCEMENT AREAS
Fuel efficiency today remains the most important requirement across vehicle segments. OEMs have conducted a significant amount of R&D over the years to improve efficiency and the results have been quite successful. Vehicle dependability is an important part of product development today, but the focus has gradually shifted towards providing enhanced initial quality.
The next important aspect of performance enhancement comes from an improved driving/riding experience that includes seamless braking and a smoother transmission. For a two-wheeler user, these two factors play an important role in ensuring sustained satisfaction. Going forward, two-wheeler manufacturing will have a sustained focus on braking and transmission duties that will result in the roll-out of more user-friendly products, said Majumdar.
ELECTRO MOBILITY IN INDIA
The advent of EVs across markets has started in a big way and given the energy bills India faced today, e-vehicles seem to be a tailor-made solution to most of our mobility needs. However, OEMs today still need more clarity regarding the exact timeframe when the government wants complete electrification and the methodology that needs to be followed to electrify the entire ecosystem. This will not only enable OEMs to streamline their future investments, but also provide direction to their R&D initiatives.
The apprehensions among customers today regarding the viability of EVs needs to be addressed by the policymakers or through a public-private initiative that answers all queries arising during the transition phase. Slind said that while OEMs can take up this task, it is not their core competency. Many manufacturers have indigenously taken up awareness programmes around the world, but the initial thrust must come from the government. Once this clarity is attained, all customer concerns will be taken care of by the OEMs.
In terms of domestic developments, various manufacturers are taking different paths towards the final e-mobility goal. While OEMs continue to invest in the ICE technology, parallel work is being carried out in the development of hybrid, mild-hybrid and e-vehicles. In the Indian context, the transition from ICE vehicles to fully EVs will not happen immediately. “We might witness a transition from ICE to a mild-hybrid, then to a plug-in hybrid, before going the all-electric way, mentioned George.
However, the transition must happen in tandem with the needs and aspirations of all stakeholders. Currently, 50 % of automotive component revenues come from engine and transmission parts. Electrification will require OEMs to recalibrate their production strategy. Equally important is how OEMs are able to collaborate with the government to create an ecosystem that eases the journey towards e-mobility. The more closely all stakeholders work towards this end, faster will be the adoption.
Collaboration would hold the key towards future mobility development. With the advent of EVs, the product development process will become faster. The absence of engine and transmission units would mean less moving parts, thereby increasing production time. Ride sharing is likely to go up, with customers accepting vehicles as a mode of transport, rather than a priced possession.
With major changes likely to be witnessed in the future mobility scenario, data management will gain high priority in the entire value chain. This will witness insurance companies assuming a more important role in providing customised insurance cover based on the driving/riding patterns of the vehicle owner. Roy said that smartphones will have a huge role to play during this transition phase as they have sensors to monitor details pertaining to a person’s driving pattern. This data can be successfully used by insurance companies.
Electrification seems to have taken off in a big way in China over the last two years with over four lakh units sold, both in the form of EVs and plug-in hybrids. This has been due to constant government incentives promoting electric mobility and discouraging the purchase of ICE vehicles. These modules will eventually make their way to other markets and the electrification trend will grow faster.
Autonomous driving is the farthest, in terms of technology. The stepping stones towards this technology have already been laid, with ADAS, smart cruise technology and automatic braking, among many others. The changes being witnessed today are faster than any technology adoption that took place a couple of decades ago, said George.
Despite so much happening in the EV space globally, advancements continue in the ICE domain. The potential for IC engines will extend for a much longer period due to intense pressure across the value chain to innovate or die. This has resulted in conventional powertrain units getting a boost, in terms of technology. The simultaneous surge in the EV technology has also prompted existing OEMs to not only work on fully electrified vehicles, but also invest in mild hybrids and plug-in hybrids. The current trends indicate that the new technologies are compelling the older technologies to get better.
Government subsidies often require batteries to be manufactured locally. However, this might not be a viable proposition for all countries and over the years, the battery technology might be sub-leased across the globe. Slind mentioned that local governments need to play a bigger role in enabling OEMs, battery makers and other members in the value chain work coherently, by having a clear policy mandate in place. These include clarity regarding the transition plan, infrastructure development, localised production and subsidies.
Range anxiety has often been considered the most important deterrent for customers opting for EVs. This coupled with charger/ adapter compatibility, should be treated with high priority by the government, if it intends to have a quicker e-mobility setup in place. Standardised parameters need to be set by the government and the OEMs will then set their own production capacities to follow the e-mobility programme.
AREAS OF IMPROVEMENT
According the Initial Quality Study (IQS) conducted by JD Power, customers around two decades ago complained mostly of manufacturing defects related to the quality of parts used in a vehicle. Buying patterns today are being driven mostly by factors such as fuel economy, quality of air-conditioning, braking performance and similar other performance-related features. Hence, customer concerns have shifted to design issues rather than product malfunctioning ones.
The aforementioned trends indicate that manufacturing, distribution and logistics are getting better. However, design issues are more difficult to address, as they cannot be rectified at the dealers’ end. The only way to solve this problem is to convey the voice of the customer to the OEM and if the problem is a common one, corrective action can be taken in the subsequent batches of vehicles produced.
TEXT: Anwesh Koley