HIREN DIVGI is Executive Director at Divgi TorqTransfer Systems Pvt Ltd
The automotive technology space is awash with commentaries, speculations and observations on trends in automotive transmissions, as the automotive world is predicted to witness significant disruption. The objective of this article is to offer a uniquely Indian perspective on the future of automotive transmission technology that in many ways may be different from what most analysts predict by trying to see which of the global trends may best fit the Indian story.
VALUE SENSITIVE MARKET
Most of the trend analysis I have come across characterise the Indian automotive consumer and market as extremely price-sensitive, averse to very high tech from a serviceability issue in small towns and semi-rural India, sensitive to fuel economy, cost of servicing and cost of spare parts. If the above features are met, they are willing to compromise on comfort, or so the thinking goes as far as transmission technology is concerned. These reasons are propounded to explain the current predominant share of manual transmissions and some amount of success of low-end automated manual transmissions at the entry level.
However, I believe this is an extremely unfair verdict on the intelligence of the Indian consumers, when they are forced to make choices with the limited transmission technologies Indian and global OEMs are offering them in India. I reckon the Indian consumer is not foolishly price-sensitive, but value-sensitive. There is deep appreciation for value in terms of ownership costs, reliability, durability, and comfort if priced rightly. I defend my proposition by the following examples.
:: The Motorcycle Story: Up until the mid-1980s, all the Indian consumers got was a two-stroke motorcycle technology. Hero Honda launched the four-stroke technology in the 100 cc segment in 1985 with a price premium of minimum 18-20 % over the two-stroke models in what was supposed to be an extremely price-sensitive market. And yet within five years it became number one, out-producing and out-selling all its competitors. Hero Honda clearly delivered a value the Indian consumer very quickly recognised.
:: The Diesel Car Story: When Tata Motors launched the Indica – the first compact hatchback with a custom-designed small diesel engine in 1998 – it shook the market leader Maruti Suzuki. The limited success of Tata Motors to gain market share is another story, but it forced Maruti Sizuki to respond with small fuel efficient diesel engines. The amount OEMs invested in the CRDi technology to make these small diesels more fuel efficient and powerful, had significant cost implications to manufacturers as well as customers, but they ended up being the hottest-selling models.
:: The Digital Divide Story: In the early 2000s, most sociologists had a lament regarding the predicted digital divide in the Indian society with the haves and the have-nots to the internet, both in terms of literacy levels and the cost of accessing the internet. Enter the smartphone with icon-driven applications, and I believe semi-literate people learned to use the internet smarter than literate people for the tremendous opportunity it means to them.
The above stories highlight the innate smartness of the Indian consumer in ferreting out value, when a larger choice of technology is offered to them, be it a motorcycle, a choice of engine in a car or a smartphone. If one further extrapolates features such as power steering, air-conditioning, ABS, infotainment system, etc. one can comfortably say that automatic transmissions will start taking a significant share of the Indian market in the future.
Legislation is the other driving force. With Bharat Stage VI emission norms kicking in from April 2020, OEMs will have to look at both engine and transmission technologies to achieve vehicle level emission norms. More number of speeds and higher ratio spread in the transmission help engines to run at most fuel efficient rpms. However, with manual transmissions this brings shifting fatigue and suboptimal performance. Therefore, the focus shifts to the competing technologies – Automated Manuals (AMTs), Dual Clutch Automatics (DCTs), Conventional Stepped Automatics (ATs) or Continuously Variable Transmission (CVTs).
Given the ecosystem of manual transmissions in India, AMTs and DCTs seem to be the technologies that can be best adapted to the Indian market. As the number of speeds increase and customers expect better drive quality and features that can be enhanced by software, AMTs will give way to wet DCTs for their sheer durability with options of hybridisation to P2 or P2.5 levels. CVTs, though promising, face the challenge of large gear manufacturing capacities getting redundant and dependence on a few globally powerful chain and pulley suppliers.
There are many who believe the DCT technology is too sophisticated and expensive for the Indian market and will be difficult to service in the field. But my take is that India is one of the largest markets for multi-disc wet clutches, although they go in a motorcycle. Further, rural India is quite adept at handling complex hydraulics, though in an agricultural tractor. Finally, semi-urban India is well versed in handling sophisticated electronics, although in a smartphone.
When the Indian consumer is offered the choice to experience and evaluate the value proposition of a technology, all I can say is be prepared to be surprised!