All the latest news from the industry weekly compiled by the editorial team for you free of charge.
This eMail is already registered.
An unexpected error occured.
Please accept our Terms of Use.
Registration successful.

INNOVATION AND ENTREPRENEURSHIP HAVE ENDURED AS CORE SKILLS IN HUMAN ADAPTATION AND WILL CONTINUE TO INFLUENCE FUTURE STRATEGIES

AUTOMOTIVE Digitisation has led to a democratisation of knowledge and innovation

Sep 26, 2018

... says Dr V Sumantran, Chairman, Celeris Technologies, who anticipates a fundamental transformation of the auto industry and mobility, in the near future. He shares his views with Shekhar Jitkar on the shortcomings in Indian manufacturing, manufacturing practices in the global automotive industry, learnings from China, and e-mobility in India.

You have been quite fortunate to get a great exposure to the best manufacturing practices in many of the global automotive companies. What do you think are the most revolutionary trends the industry has witnessed so far?

Recent trends in manufacturing have logically evolved in waves. During the 1980s, there was great push for robotics and automation and we witnessed the auto industry commit a great deal of investment – examples are the FIAT Robogate plant in Italy and the GM Cadillac plant in Hamtramck, USA. In the 1990s, emphasis extended to ‘lean operations’ and the industry sought to learn from Japanese manufacturers, such as Toyota, and implement lean systems. Even a proud and high-tech German organisation like Porsche had to admit that they needed help from Japanese manufacturing specialists. We have since seen the importance of product customisation that is leading to emphasise on high variety production. Increasingly, now we are seeing the role of AI-enabled enterprise operations supported by an IoT environment. The consequent focus on Industry 4.0 initiatives by European industries is likely to create a new paradigm.

How can the challenges of complexities aroused out of collaborative manufacturing, outsourcing, innovation compulsion, flexibility, and now digitalisation be overcome?

Our current digitised economy has created new opportunities which can be seen as challenges by organisations that cannot keep up. Digitisation has led to a democratisation of knowledge and innovation – a colossal GM still has to reach out to a Silicon Valley start-up to master autonomous driving. Digitisation has led to a dispersal of production systems so that organisations may ‘design-anywhere, build-anywhere and sell-anywhere’. It has accelerated the clock-speed of almost all industries, and this means that product cycles and innovation cycles are much faster. And digitisation has allowed many organisations to vapourise the middleware – we can go from art-to-part as with technologies like 3D printing allowing customisation to a lot size of one. Organisations are learning that if they fail to stay up-to-date on digital processes and enablers, they will quickly become uncompetitive.

Where do you see Indian manufacturing heading to, especially when manufacturing conditions are getting competitive and economic conditions becoming uncertain?

Indian manufacturing suffers from three strategic shortcomings. One, we have remained sub-scale by global standards in several critical enabling technologies, for example, electronic components and specialised machine tools. These are the building blocks of a competitive industry and being sub-scale here means that we depend upon European, Japanese and increasingly Chinese sources. There is a cost and speed disadvantage from this dependence. Secondly, Indian industry overall has proven slow in investing in R&D and innovation. High cost of capital has rendered our industrialists to be risk-averse. This means that we are not at the leading edge of product innovation as we should be. Third, our national industry policy is poorly aligned as a result of a deficit of trust between the government and industry. Hence, our much-needed ‘Make in India’ platform, which should have been an emphasis on Indian products developed and made in India for global markets, is floundering. So, we are prepared to settle for a Make-for-India outcome, allowing global companies to relocate some of their manufacturing in India. This will bring jobs to India, but not with a long-term strategic advantage. India does have excellent human resource potential and we are sadly failing to adequately leverage this asset strategically.

China and India are both big auto markets today. What do you think are the similarities and differences? Any learnings from China for India?

First, we must face reality. China is a 30-million vehicle market while in India we have breached the 3-million vehicle level. Granted, in the 2-wheeler space and components industry, we have less of a scale disadvantage. China’s policies have been closely tuned to their industry’s growth over the past three decades. When they invited foreign players, they insisted on 50% domestic ownership and transfer of key technologies. They promoted investment in large scale operations through low-interest loans and subsidies so that job creation was accelerated and large-scale capacity for electronics and auto components was enabled. In the current phase, they are consolidating their industry to groom 5-6 global automakers who can take on the world. By closely coordinating the Next Energy Vehicle policy with investments and market incentives, they are hoping to leap-frog western automakers in the transition to electric vehicles. Crucially, China has had a clear long-term vision supported by close alignment of industrial policy with investments and market conditions. There, government and industry seem to move in lock-step.

What are your views on the future of the car and urban mobility, the subject of your recent book?

This is the subject of a book that I have just co-authored, published by the MIT Press: Faster, Smarter, Greener: The Future of the Car and Urban Mobility. We anticipate a fundamental transformation of the auto industry and mobility. By the end of the 20th century, our society had accorded the automobile a central role in urban mobility. In this century, even as mobility remains an essential aspect of development, we are obliged to confront the consequences of accelerating urbanisation, environmental impact, and sweeping changes to culture and user habits, triggered by a digitised world. Innovation and entrepreneurship have endured as core skills in human adaptation and will continue to influence future strategies. Our book explores these issues and proposes a scalable and adaptable framework that can help guide our society’s efforts to transform urban mobility to becoming future-relevant.

There's a strong focus for mobility in India to go electric. What do you think about its feasibility and adoption in India, say by 2030, which is the target? Do you see any challenges?

As our book notes, electrification is just one of the tools we must employ to transform urban mobility to become sustainable. This has to be preceded by better urban planning and ensuring that as our cities grow, transit-oriented development is embedded in urban architecture. In addition, our cities must embrace non-motorised modes to complement vehicles. Many European cities are showing us the way in this regard. Digital technologies (enabling connectivity, fare-payment, car-hailing, journey planning, etc) are also an important contributor to efficient urban mobility. Above all, we will need a dynamic policy and regulatory regime so that we are able to nudge the trajectory of urban mobility towards societal goals of being user-friendly, economical, sustainable and inclusive. Electric vehicles (e-bikes, buses, shared-taxis and cars) may be expected to play a role within this comprehensive mobility architecture.

Image Gallery

  • Dr Sumantran is Chairman of Celeris Technologies and an advisor to several Fortune-100 organisations in auto, industrial equipment, defence, & aerospace. Previously, he has worked as Executive Vice-Chairman of Hinduja Automotive, UK, as well as Vice-Chairman of Ashok Leyland; and CEO of Tata Motors’ car business. Prior to joining Tatas, Dr Sumantran had a 16-year career with General Motors in Detroit and subsequently at GM-Europe. He has served on the Science Advisory Council of the Prime Minister of India and the Scientific Advisory Committee to the Cabinet of the Indian Government.

Companies related to this article
Related articles