As the Indian economy grew over the past two decades, the automotive sector has grown from a small, protected industry to be a growth driver for the country. While it is still overshadowed by the Chinese automotive industry in scale, India has made impressive progress. It is already the largest two-wheeler (carrying internal combustion engines) market globally and is among the top five markets for four-wheelers.
Indian automotive executives form a material employee pool of global automotive leaders. India is also home to some of the important R&D programmes of global auto companies. Within the country, the auto industry contributes significantly to the economy and employment. It currently accounts for 7 per cent of the country's GDP and is expected to rise to 12 per cent by 2026.
Since automotive penetration in India is still at a very low level, the situation is ripe for an Indian company to make an even bigger mark on the global automotive stage.
Ahead Of The Curve
As a leading consumer of automotive products, India has witnessed impressive growth over the past decade. It is due to this growing demand that the country has become the largest passenger vehicle market for Suzuki Motor, and Hero MotoCorp continues to maintain its position as the world's largest two-wheeler manufacturer for 17 consecutive years.
The spurt in demand and growth potential has attracted big investments in the industry from Indian as well as global giants. Almost all major global automotive companies are now present in India and have committed investments aligned with the burgeoning demand. Much of this investment is directed towards building R&D capabilities. It will ensure that the next generation of automotive technologies will not only be built here but will also be 'Made in India' in the true sense.
Meanwhile, homegrown auto companies are making their presence felt, both locally and around the world. Companies such as Hero MotoCorp, Bajaj Auto, TVS, Mahindra and Tata Motors are putting India on the world map as they expand their operations across continents.
Making A Mark
Over the past few years, India has emerged as a manufacturing and export hub for the global automotive industry owing to its low-cost manufacturing through economical but skilled manpower and low-cost steel. However, the country has moved up the value chain, and a clear pattern is emerging in terms of increased innovation and technology upgradation. Indian MNCs are investing heavily in R&D for developing future-ready technology solutions. Already working towards achieving a world-class emission standard through BS VI by 2020, India is poised to set up an ecosystem suitable for large-scale acceptability of electric vehicles.
It is only a matter of time before the next auto-tech giant emerges from India. Examples abound of new start-ups, which are disrupting old systems. For instance, Rivigo, a Gurugram-based surface transport and logistics company, is reshaping the transportation model.
Using a relay-driver system, backed by a simple yet intelligent technology application, the company has managed to reduce transportation costs for clients by 10-12 per cent and delivery time by 50 per cent, besides improving the quality of life for drivers. It is just one example of the new auto-tech start-ups.
Between investments by the auto industry behemoths and out-of-the-box approach of the new-age start-ups, India is poised to present a bunch of homegrown unicorns to the global automobile industry.