Addressing Automotive Industry Challenges With Increased R&D Thrust

Addressing Automotive Industry Challenges With Increased R&D Thrust

Event July 2020 CII Addressing Automotive Industry Challenges Increased R&D Thrust
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The 12th edition of the ‘Automotive R&D Trends’ conference was recently organised by the Confederation of Indian Industries (CII) virtually for the first time with an aim to bring together industry voices to brainstorm on the road ahead for the auto industry even as it grappled with the COVID-19 pandemic

The outbreak of COVID-19 has clearly brought to the fore the vulnerability of the country’s auto industry as it had been relying heavily on Chinese imports. The country imports auto components worth $ 17.6 bn and imports around 27 % of its components from China. The ‘Automotive R&D Trends’ conference stressed on the need for the industry to de-risk itself from relying on one particular region with an increased thrust on local R&D as well as step up deep-localisation efforts to enable the country stay in tune with PM Modi’s vision of ‘Atmanirbhar Bharat’. The 12th edition ‘Automotive R&D trends’ conference that was recently organised virtually by the Tamil Nadu Technology Development & Promotion Centre of the Confederation of Indian Industries (CII), served as a platform for industry stalwarts to brainstorm over the new normal in the auto industry and how it can bounce back to become more creative as well as diligent in managing new lifestyle with local R&D capabilities.

The conference featured over twenty delegates from various segments of the automotive industry such as Dr N Saravanan, CTO, Ashok Leyland; Dr Bhaskar Ramamurthi, Director, IIT, Madras; Dr Arun Sampath, Chief Engineer & Head Innovation, & Global EV Tech Centre, Mahindra Electric; Sanjay Gupta, Founder, Faraday Battery Ltd.; A Ramasubramanian, President, AMW Motors Ltd.; Ganesh Mani S, Director – Manufacturing, Hyundai Motor India Ltd.; Dr Shankar Venugopal, VP – Technology, Innovation and Knowledge Management, Mahindra & Mahindra; Manisha Sriraman, Managing Director, Accenture India, among others participated in various discussions during the day-long conference. The speakers threw light on various sessions categorised as electric vehicles (EVs) and alternative fuels; OEM, MSME & infrastructure solutions to the new paradigm and digitally transforming mobility & manufacturing digitisation that enabled the virtual audience to gain valuable insights on the latest automotive R&D trends. Auto Tech Review was the Knowledge Partner for the event.

BUILDING CAPACITIES

The growth of global OEMs sourcing products from India and increased indigenisation of global OEMs is turning the country into a preferred designing and manufacturing base for the industry for some time now. With COVID-19, Indian manufacturers have a unique opportunity to blend advanced manufacturing capabilities with low-cost labour and create an extraordinary competitive advantage. Digitalisation has driven a paradigm shift over the last three months over traditional ways of manufacturing, handling, storing, and transporting things. Such an approach can also create a base for SMEs to grow significantly, as it enable them access to newer markets as well as allow them to compete with or partner with industry heavyweights. The need of the hour is for the SMEs to take the lead in adapting the new age technologies and making it an integral part of their respective business strategies, noted Dr Arun Jaura, Conference Chairman & Managing Director, Michelin Technical Centre India.

The auto industry will need to act decisively, both in the short term and long term. While the short-term priority would be to maintain liquidity and efficiency, the medium-to-long term focus should address overhead reductions, efficiency improvements, maintain stakeholder communication as well as explore newer opportunities. According to Dr N Saravanan, CTO, Ashok Leyland, significant investments are required to develop as well as validate solutions while addressing skill gaps.

Given the prevailing pandemic and prolonged slowdown before COVID-19, companies are planning to conserve cash to tide over the crisis situation as they had made substantial investments during the BS 6 switchover and there is also an uncertainty over demand for CASE. This clearly indicates that new investments are going to be delayed. However, can the industry afford not to invest given the fact that demand is significantly low is an interesting equation that needs to be tackled cautiously. The ecosystem now also requires consortiums with academic, industry and national labs to develop solutions locally and validate them as well as require companies to co-develop technology and share development costs, thereby reducing dependence on a particluar region for production. Ravin Mirchandani, Chairman, Ador Powertron Ltd, said solutions such as battery swapping models in electric scooters in China have been able to reduce vehicle costs by as high as 60 % and can be a great example for a cost-optimised future.

PANEL DISCUSSION

The outbreak of the COVID-19 has brought about fundamental changes to various business models worldwide. The longer the auto industry continues to face the aftereffects of the pandemic, the higher would be the extent of damage it will have to endure. With shared mobility getting a serious hit due to the pandemic and public transport usage expected to decline as well, what will be the way forward for the future of mobility? The panel discussion themed ‘Is India ready for transforming mobility solutions?’ was moderated by Deepangshu Dev Sarmah, Editor-in-Chief, Auto Tech Review. The panel comprising Dr Arun Jaura, Ganesh Mani S and A Ramsubramamian, were unanimous that disruptions in the past have led many companies to restrategise their respective business operations that gave birth to new business models. Mobility-as-a-Service is gaining ground, on-demand rides are becoming common and big data, analytics and artificial intelligence as well as machine learning are playing a tremendous role. The mobility industry as a whole has been undergoing a phenomenal change and is opening up new vistas for players in the auto sector that will require an all-new R&D thrust.

ROUND-UP

The Indian auto market (including the auto component sector) is the world’s fourth largest industry, and is expected to reach Rs.16-18 tn by 2026. The central government aims to turn India into a global R&D hub and has already set up NatRiP and building infrastructure as well as national automotive boards to act as a facilitator between the government and the industry for a faster turnaround. There might be some course corrections due to the ongoing pandemic creating problems for almost everyone in the value chain at a time, when the Indian auto industry is hoping to recover after a protracted slowdown. However, the silver lining is that the Indian auto industry has digitalised much faster than contemplated, and is expected to act as a major lever for the survival of the industry.

TEXT: Anirudh Raheja