The Indian Automotive industry is on the cusp of a massive transformation. The sector, which accounts for 7% of the national GDP and is worth $118 billion, is expected to reach $300 billion by 2026. The global transfigurations caused by new technologies, changing workforce models, and the new normals set by the pandemic are changing the face of the automotive industry in India beyond recognition.
India presently accounts for 35% of the engineering R&D across the globe, and a key sector driving this transformation is automotive engineering. Let us take a look at the leading trends that are transforming the automotive industry in India.
Industry 4.0 Capabilities
The integration of information technology with traditional manufacturing has given rise to megatrends such as the Internet of Things (IoT), Artificial Intelligence & Machine Learning (AI/ML), Digital Manufacturing, Self-driven Cars, Robotic Manufacturing, etc. These trends have led to a paradigm shift in how the automotive sector operates.
Car manufacturers will have to develop and manage some key shifts to thrive in the industry. Industry 4.0 capabilities will help car manufacturers address quality issues and process-driven throughput losses. In an Industry 4.0-ready smart factory, digitization will drive not only automation but also changes in manufacturing processes.
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Value-based Supply Chain
The automotive industry ecosystem includes multiple tiers of suppliers and manufacturers. It is, by far, one of the most complex supply chain systems in the world. With it, this supply chain brings high fixed and variable costs that significantly impact price points of the products.
Car manufacturers are increasingly insisting on robust contracts and agreements that accurately define costs and require strict reporting targets. This has given rise to a new crop of corporate lawyers who specialize in the automotive industry’s ecosystem to help the industry with legal and contractual aspects.
Do you have the attributes to be a successful corporate lawyer in the automotive industry?
Transparent Operations
An average vehicle is built off about 30,000 different parts, either manufactured inhouse by car manufacturers or outsourced from third-party suppliers. A delay or quality issue in one section of this supply chain could result in massive losses. To counter this, many automobile manufacturers are beginning to make the supply chain and inventory management more visible. Blockchain, IoT, and similar technologies are enabling car companies to bring the entire supply chain ecosystem on a common platform and make the process transparent to all stakeholders involved. We have already discussed how Blockchain is enabling supply chains to become more transparent and fair to all parties involved.
Additionally, many car manufacturers depend on predictive analysis for early identification of delays or overlook in quality checks. Predictive analysis can also be handy in pandemic situations such as 2020, to perform risk identification and risk mitigation to minimize losses.
Service and Support Ecosystem
As discussed above, the Indian automotive industry comprises of a variety of stakeholders, from OEMs to spare parts’ manufacturers to dealerships. Each one of these stakeholders holds vital data regarding the vehicle or the consumer buying the vehicle.
The availability of this data is rapidly taking the automotive industry away from the ‘command center CEO office’ approach of decision-making to a more decentralized approach backed by data and analytics. Customer automotive data finds applications in driving sales, optimizing supply chains, and enhancing product design for newer vehicles.
As the demand and sale of self-driven, electric and hybrid vehicles rise, manufacturers will also have to upgrade their networks to include specialized expertise in the fields of electronics, mechatronics, AI & ML, data analytics and data engineering, etc.
New Workforce Model
Automotive manufacturing in India flourished for the longest time because the parameters it operated within were quite static. The knowledge and skills required to become a part of the industry also remained largely unchanged. That is not the case anymore.
Industry 4.0 has brought about a 180-degree change in the industry. With technology’s impact on the sector more pronounced than ever before, it has given rise to a new set of jobs with unique skills. The automotive industry now employs a blend of skilled workforce from the automobile, mechanical and mechatronic, electronic, information technology as well as industrial engineering fields.
The industry will also add more jobs related to AI & ML, IoT, deep learning, 3D printing, additive manufacturing, etc. The industry is already short on skilled labor that can co-exist and concomitantly with automated systems. As one of the workforce solutions to address this gap, many automotive companies are partnering with universities to design automotive engineering courses that go beyond traditional curriculum and specifically address industry challenges.
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