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Automotive Product Finder Magazine | Is automotive industry ready for digital transformation?
Is automotive industry ready for digital transformation?
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With automotive industry transforming into more digitally advanced industry, connected cars have been a reality today. There’s a big shift going to take place in automotive industry. Connected car, the new buzz word in the automotive industry, is set to become a common phenomenon in the Indian market in the near future with rapid adoption of electric vehicles, according to a Deloitte report. This article takes a close look at the recent trends that has shaped a step towards digital transformation.
According to Markets and Markets observations, he Indian connected car market is projected to grow at a CAGR of 22.2 per cent during the forecast period, to reach USD 32.5 billion by 2025 from an estimated USD 9.8 billion in 2019. Some of the major growth drivers are increase in connected features offered by automobile manufacturers in economy models and government mandates regarding connected technology in passenger cars.
Connected car has ability to communicate bidirectionally with other systems outside of the car (LAN), shares data with other devices both inside and outside the vehicle.
As per the 2020 Global Automotive Consumer Study by Deloitte, an annual report which comes up with insights on the automotive industry globally, the Indian market is expected to witness enhanced interest and demand for battery electric vehicles (BEVs) and connected vehicles going forward.
“Connected cars are poised to become a common phenomenon in India in the near future. And their relevance in the next few years is only bound to increase with the expected wide-scale adoption of EVs where connectivity features will help owners locate nearby charging stations and access telematics data among several other things,” the study outlined.
“The consumers’ willingness to pay for advanced and connected technologies has improved over the last two years which is evident in the rising sales of cars that are internet connected, despite the slowdown in sale of passenger vehicles, says, Vinit Bansal, Founder and MD, EV Motors.
Connected car willingness
Experts from the industry identify that the a substantial number of people are talking about their willingness to pay about Rs 50,000 to Rs 1 lakh extra for connected services in their cars.
Besides, the study reveals that people are looking keenly at entry of affordable products in the electric vehicle segment. Bansal states, “The quick adoption of connected car connected car technology in electric vehicles was due to the need for a unique feature to sell their products. Additionally, people are also looking at it from a new perspective.”
“Automakers will soon be launching connected cars with almost all features accept automatic driving as it is subject to approval and also will take time to educate about the same and make it a legally viable solution meeting all requirements and on solving all queries,” Bansal points out.
“Moreover, in the time to come OEMs (original equipment manufacturers), are expected to struggle to get consumers to pay for advanced connectivity features, even when it means increasing road safety. The perception of Indian with respect to safety while driving connected vehicles is also very low,” the report notes.
In India, cars like MG Hector, Kia Seltos and Hyundai Venue come with interesting connectivity features. For example, MG Motor India calls its Hector SUV as the internet-enabled car and it has emerged as the new leader in the mid-size SUV segment in 2019, beating Tata Harrier, Jeep Compass and Mahindra XUV500, despite being a late entrant in the segment.
One of the largest car markets in the world, India ranks first in data anxiety related to the connected vehicles. On the negative side, 69 per cent of Indian customers are the group of buyers who are concerned with the security of biometric data generated and shared with external parties by connected vehicles, reveals the study.
The study also stated that in India automobile OEMs are not the top choice in terms of trust for sharing of data by consumers.
Indians make up the top demographic region that is concerned about security of biometric data shared with connected vehicles, report from deloitte noted.
Bansal also believed that with the introduction of Personal Data Protection Act, the automotive industry would need to add another layer of regulation to balance benefits of connectivity with protection of consumer data.
It is noted that the number of people reporting at least occasional use of ride-hailing services has increased in the last few years as consumers see multiple benefits in it.
Apart from these concerns, around 80 per cent of Indian buyers prefer vehicle connectivity. India beats major auto markets like China, US, Japan and Germany when it comes to accepting the vehicle connectivity identifies the report.
In the coming years, the development of energy-efficient E-Mobility as well as connected cars, autonomous and semi-autonomous cars will generate possibilities for the automotive terminal industry. As of now, the market is highly consolidated with only few players which can hinder the overall growth of the market. But on the positive side, the rise in the start-up in India is entering this domain to develop such technologies. Major automakers are seeking help or investing in these start-ups for upgrading with such new technologies.
Electronic components on rise
As per Global Market Insights, ADAS automotive electronics market will grow at a CAGR of 9.5 per cent till 2030. The rise in electronic component use in vehicles today is one of the reasons which have been catalyst in the adoptions of the connected cars. Bansal says, “Electronic components applications for telematics, in-vehicle entertainment, batteries, ECUs, etc has grown over the years. Artificial intelligence or machine learning technologies will play a vital role in revolutionising the automotive industry.”
In a nutshell, automotive industry is in the phase of developing in-house technologies. Experts believe that this phase will continue for next five years and in the course automakers will be launching their new improved products. No doubt electric vehicles will continue to remain in focus. The recently launched product from MG has already received more than 1000 orders for its EV, which equalled cumulative EV sales of the country last year. Soon India will experience new technologies and concepts in auto industry.
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