What do you see as some of the general trends in the Indian automotive industry?

The global automotive industry has undergone significant transformation, with this process starting around 2018-2019. Unfortunately, we did not, as an industry, anticipate that the transformation would be so rapid. Responding to fast paced connected, automated, shared, electrified (C.A.S.E.) trends has required a lot of focus and the industry is close to catching up with this technological disruption. The biggest challenge that the industry faces today is in terms of development time because today we are not really in a position to separate hardware and software. Apple, for example, has done a fantastic job in this regard. The automotive arena is seeing a shift towards software defined vehicles (SDVs) where everyone is looking at getting a piece of the middleware because the top and bottom can always be obtained from other sources. The differentiating factor, going forward, is going to be the middleware. So there is a lot of activity centered around software development for SDVs. We are already seeing early signs of this in India. Although this might not happen for the next two to three years, it will most certainly happen by 2030 and this is because such change requires a foundation to be laid first, beginning with changes in the architecture. Initial discussions with OEMs are already happening which is a good sign.

Another point is that while this is still around 5-6 years away, we are also seeing autonomous mobility picking up. When we talk of advanced driver assistance systems (ADAS), we have to divide it into assisted, automated, and autonomous. Autonomous is a long-term dream for India because we have to build the enabling infrastructure and ensure road discipline etc.  But there has been a spike in assisted functions, which is an extended safety function. By 2025-2026, I believe at least 30% of vehicles will have some sort of assisted functions and we will slowly move to L2, L2+, hands-off functions, and auto park assist. These are some of the automated functions that we could see.

A third trend has to do with the vehicle getting more connected with the outside world. We see a lot of body electronics getting changed. For example, previously, cars never had telematics control units. Today, there is a proliferation of telematics control units both 4G and 4.5G as well as 5G and of gateways. So this is another development that we will see over the next 3-4 years.

The fourth trend is the change in vehicle architecture. This is because the current distributed architecture will be a challenge if there are going to be enhancements in the future. So there are many OEMs working on developing new architecture so that you can have zonal control units to allow full control over updates.

How is Continental responding to these trends?   

We are already engaged with virtually every OEM. In terms of ADAS, we are developing a system for an Indian OEM customer which will be launched at the end of this year and is a park assist. We are also working with one of the biggest OEMs on the launch of 5G telematics control unit gateways. We are working on zone control units and, as part of an extended shift, OEMs, motivated by CAFÉ norms, are looking at tire pressure monitoring systems. For this, we already have installed capacity in Bengaluru where we locally manufacture sensors for tire pressure monitoring systems. The other aspect is enhancing capacity for airbag control units. The number of airbags is set to go from 2 up to 6. This is linked to Bharat NCAP but certainly we will see a good amount of proliferation happening on the safety aspect.

What is your vision for the global and the Indian automotive industry for the next five years?

For the global automotive industry, the key factor will be the migration to SDV. Already the bits and pieces are there. For example, I was pleasantly surprised when a premium German OEM introduced a seat heating function as an option. With this, the customer can choose to use this function only during winter so they can pay and get it for only three months. Now this is an enablement that only an SDV can do. This will allow OEMs to do more business beyond the point of sale, indeed, across the entire lifecycle of the vehicle. SDVs are also reducing the development time and cost. There’s also a lot of data acquisition that happens which can be used and monetized. These are some of the advantages associated with SDVs which quite a lot of people are exploring.

The automotive industry has come a long way.  Earlier, we were known for specification, validation, designing and we came with a philosophy that unless it is perfect, we do not launch it. However, with a lot of software coming in, this approach is changing. Several software companies are now jumping onto this bandwagon. Their philosophy is to launch and fix it over the years. But when it comes to cars, there is a safety aspect that is involved. So we need to bring both together and learn from each other; the automotive industry needs to learn about speed and agility and software companies need to learn about system development.

Where do you see Continental India in the next five years?

We continue to grow fast. In the past 5-6 years, we have grown faster than the market. Certainly, we would like to grow and outperform the market in terms of introducing new technologies. But the main challenge for us will not be about bringing in technology but about bringing in technology in a way that makes it affordable for the Indian market. The Indian market is very value driven and that’s where the challenge lies. That’s why we are making considerable investments to ensure that production is local, made-in-India so that one does not have any additional cost burden. At the same time, we have to ensure that the product meets Indian requirements.

And to conclude, what are your thoughts on Bharat Mobility Global Expo 2024?

This is the first time we are seeing all major associations coming together, be it ATMA, ACMA, SIAM, CII, NASSCOM, and many government bodies. This is a fantastic initiative from the government and we would like to see this event being held every year or at least once every two years. The government has set a bold target of enhancing exports which was at around $20 billion last year to $100 billion by 2030, i.e., five times over the next six years. Given our competencies, I think this is certainly achievable.

Amrita Shetty

Amrita Shetty is Communications & Content Senior Manager within Frost & Sullivan's Mobility practice.

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