Today the economies are dramatically evolving, they are triggered by development in emerging markets, the accelerated rise of fresh technologies, more refined policies and changing consumer preferences around ownership. Digitization, increasing automation and new business models have revolutionized other industries, so why should the automobile industry be left behind? These factors are giving rise to two big trends in the industry in the country:
Firstly, made it’s regulations tighter. A large number of regulations for the automobile industry have been thought very keenly in the last five years. These aim to take India to the league of their own – that is technologically developed. Today, auto makers are forced on an issue a voluntary recall in case of a manufacturing defect, as they anticipate severe penalties when government makes it mandatory under the Motor Vehicle Act. This is because if they don’t wash up their act now and are found guilty once the law is in place, the penalties could be huge amounts! In addition to this, the government plans to make frontal and side crash tests mandatory for new vehicles from October 2017 and existing vehicles by October 2019. This has made car makers beef up safety features. To pass these tests, cars must have airbags and other safety features such as child restraint systems.
Secondly, export revolution. Exports of cars, utility vehicles, two-wheelers and commercial vehicles have grown every year since 2000. In 2014-15, auto exports were at a record high. Exports have helped automobile companies mitigate risks from the cyclical demand in home and overseas markets. The tepid demand in the local market in the last three years saw a renewed exports thrust by automobile firms, particularly those that saw a sharp decline in domestic volumes. Every company is looking to make use of the favorable manufacturing atmosphere in the country. The sector may also benefit from the Make in India focus.
The country sure has leveled its standards with the rest of the world. America had Ford. Germany then came up with Volkswagen. Britain got Rolls-Royce. So Sanjay upstaged the rest with Maruti. It was this noisy, unattractive, 2 Cylinder, quite inefficient and wasn’t very friendly on the fuel either. However it was a good start. Then came the big daddies of the business – TATA, Mahindra, Bajaj, Eicher and Premier escalating the expectations from the cars even further. Thus today – the focus is on lighter, faster, more powerful and safer vehicles. Manufacturers are constantly changing our understanding of what a ‘car’ is, what we can do in it and how we power it. For manufactures and suppliers, this means new directions, new processes, new capabilities and new strategies—and the sooner the better!