Tata Group patriarch Ratan Tata on Monday said auto companies need to focus on innovation be successful. Citing Tesla's innovative approach that disrupted the automotive industry, the 82-year-old business tycoon said it is quite conceivable that a leading car manufacturer would be Elon Musk's firm rather than auto giants Ford, GM, or Mercedes.
"So tomorrow the largest carmaker could be an Apple because it brings to the table a new approach to doing something," Tata told CNBC-TV18, implying that the companies with innovations had an edge in the auto sector.
Giving an example of innovation in business area, he said if you look at the automobile industry and the changes that are being envisaged today, such as autonomous driving and artificial intelligence, it is something that would be laughed on 10-15 years ago and yet it is happening in a smokestack industry.
Tata said that smokestack industry -traditional industry such as heavy engineering - may find it difficult to revamp their entire supply chain. Such industry can improve on it, "but it is by and large changing it compared to what is happening in the digital area", he said.
"The barriers are coming down and one way to look at it is that is being driven by the hardship that we are all facing in the marketplace caused by completely different phenomenon namely a virus that has overtaken the world," he said.
The economic impact of coronavirus is becoming visible on the industry, especially the already stressed auto industry. The COVID-19-led nationwide lockdown has impacted their liquidity, supply, production and demand. Auto companies have had to close their factories to contain the spread of coronavirus, which will lead to drop in revenues.
On Monday, Tata also took to Instagram to applaud entrepreneurs for their far-sightedness and creativity and advised them to adapt innovation to tide over the coronavirus-led crisis. In his post, the Chairman Emeritus of Tata Group said that the coronavirus crisis will "force entrepreneurs to adapt and create".
"In past difficult times, entrepreneurs have displayed farsightedness and creativity that could not have been believed to exist. These became the flagpoles of innovation and new technology today. I hope that the ability to find another way to build a product, run a company, run operations a better way, will emerge as an outcome of the current crisis," he said in his latest Instagram post.
By Chitranjan Kumar