Well, the year has not started on a better foot. The third wave will keep the automobile industry in a limbo for some more time. Consumer sentiment will continue to be bordering on the anxious and negative. The experiences and scars of the first two waves have taught us how to approach tough times and plan for them better. Unless the situation goes totally out of hand, experts say, we should see the curve flatten by March-end. This means that this financial year should be written off for the automakers.
A flattened curve and enough chips will not be enough to revive sentiments. Social psychologists say that the end of negative events and material reasons are not enough to infuse positivism in the human spirit. The end of the Second World War and the Marshall Plan were not enough to spur Europe back into action. There are bigger and deeper factors, events and initiatives that need to work together to create the right waves and symbols of optimism and pride.
Similarly, if the Indian automobile industry is hoping for a recovery after three years of decline, there needs to be a combination of actions and events working together to create the spark! Some of them could be global being adapted to our marketplace, but all will be relevant to the Indian customer. Some will directly impact the buyer while others will impact those that offer the solutions to the buyer.
I look forward to 10 such actions and events happening over the next 12 months that could play that role.
#1 – Completing the EV protocol
The electric mission has seen enablers in the form of Auto PLI, FAME and ACC. It now needs regulations on performance, safety, swapping, charging and disposal to complete the protocol. That will demonstrate true governmental commitment to the cause.
#2 – A Battery Cohort
In tandem with the regulations, the battery makers need to create a consortium to combine resources on research, manufacturing, and recycling for the Indian market. In the initial years of this ‘startup’ industry, it has to be all about collaboration and co-creation. Competition can happen later when the base is built. That is the only way India can make a mark on the global map in electric batteries and BMS.
#3 –2W shakeup
Along with order being set in, one also needs some healthy chaos to stir up consumer interest. That will happen in the 2-wheeler industry. The challengers are gaining ground at the expense of the legacy brands, which is brilliant for overall maturity of the product segment. The fact that electric 2Ws are now more than 10% of total sales means the inflection point has been reached. Ola, Ampere and Ather will soon become mainstream creating their own legacies.
#4 – Return of the “Jodi” (pair)
With due respect to Mr. Spielberg, the pair of Maruti and Bajaj will strike back. These two brands have been the brunt of jokes and memes for seemingly losing the ‘plot’. Both will bounce back in 2022. Maruti Suzuki will reappear all guns blazing with new products and renewed focus on CNG and flex-fuels. Bajaj, very much like Toyota, might come a bit late, but the improved electric Chetak will set new benchmarks. And that will be a huge boost for the marketplace as the crowd loves the bruised hero coming back with a bang! Even today’s generation waits for the next Rajinikant or Salman film release.
#5 – CX over showrooms
I hate using jargon, but Metaverse is finally happening. Basically, virtual experiences are getting the better of physical ones. Hyundai has launched Wia. Volvo has perfected a 100% immersive AR showroom with Microsoft. The challenger brands will use this as part of their reach strategy. We will see the birth of EFH – Experience from Home. This will make it better for consumers at large as the experiences will be tailored around them and not the other way round.
#6 – Leasing becomes the norm
Given the global re-alignments happening in this space, leasing will become a pivotal tool used by both automakers and independent brands to make the personal vehicle more affordable and accessible, especially electrics. The solution will cover used-vehicle businesses too as this segment will outgrow new vehicles by 2:1 in the next two years. Twelve-month lease offers could well be the norm very soon to ensure penetration.
#7 – Public transport version 2.0
One lesson from the pandemic is the need for cleaner, safer multi-mode public transport systems, combining road, rail and water. Key cities have overhauled their grids and will roll them out in 2022 giving the average man and woman a viable alternative mode of mobility to buying personal transport. World-class bus and metro / train services will be seen in the main metro cities this year ushering in new-age green technologies in public transport.
#8 – More than chips
This is one area where global developments will have an impact on Indian requirements. Given the temporary paralysis due to the semiconductor shortage, the industry will work on developing other embedded alternatives. The entire structure of chips and software might get recast with other modes of processing as well as higher processing powers in place. 5G will ensure ultra-reliable low latency communication. And the Indian automobile and IT industries have to create an R&D consortium to devise solutions for tomorrow’s mobility requirements.
#9 – Components make India proud
The component makers make India a global automotive power to reckon with. They have created a value standard that enables the automakers to be hyper-competitive. While the marketplace is still untapped in terms of penetration and maturity, the supply chain is robust and ultra-refined in capabilities and the urge to break fresh ground.
#10 – SMEV takes charge
The pandemic was a terrific opportunity for SIAM (Society of Indian Automobile Manufacturers) as an industry body to set the agenda of action and thought for one of the country’s key industries. Sadly, it chose to stay quiet and play a passive role. With the growing narrative of electric mobility, it is time SMEV (Society of Manufacturers of Electric Vehicles) takes the baton of representing an industry that is proactive and progressive. The change of order itself will shake up the industry into adopting a more involving and inclusive posture to nation building!
While I foresee that all the above will take shape for sure, all might not start in tandem, which is natural. The vibrations and ripples they will create will have a far-reaching impact on the entire ecosystem that the industry supports. That will send the right signals to the average man and woman to look at an automobile once again, without apprehensions and anxieties. The industry must hold out the hand of reassurance and responsibility to both the potential and existing customers.
It is very much like the multiple clues of a Dan Brown novel…they seem pretty innocuous in isolation, but together are potent enough to unlock hidden power and create miracles!
