The world has passed through unprecedented times and the challenges faced have been common from which some countries have still not recovered. India has shown resilience by bouncing back despite constraints. This was possible because of the boost the manufacturing industry has received from the Government of India with initiatives, such as Aatmanirbhar Bharat, Make in India and the PLI scheme.
Automotive industry has been a significant contributor to the manufacturing industry. Over the past few years, it has faced several challenges - rapid changes in emission norms, COVID-19, Russia-Ukraine conflict, shortage of semiconductors, and the list goes on. However, several measures are being taken to ensure that the bottlenecks are resolved efficiently.
We see a significant shift of the industry towards self-reliance in design & development, and also a reduction in the percentage of imported parts. Measures such as thrust on localisation, and creating a buffer of inventories and stocks, are the need-of-the- hour to manage this uncertainty. These are few derisking options to approach issues of rising input costs. Major trends suggest focusing on future management, along with the present, is the path to advancement.
Other key factors are the rapid change of technology and the evolution & adoption of information and communication-related technologies that are taking place at an unprecedented scale.
Also, the swift move of the automotive industry towards electric and hybrid vehicles will require manufacturers to equip vehicles with electronic necessities like LED headlamps and accessories, such as infotainment systems and telematics that consumes less power. ADAS features are increasingly becoming popular in the new models. This transition of the Indian automotive industry from ICE to EVs will open doors for opportunities to stabilise businesses and move forward.
Similarly, there is a focus on AI, Big Data, Industry 4.0, digitisation etc, to make the manufacturing processes more robust and dynamic. This massive shift will also create opportunities for the Indian players. Hence, there should be an enhanced focus on building competencies and putting emphasis on localisation.
Organisations’ needs and outlook have evolved, and so have people competencies that are required to address the evolving ecosystem. It is expected that in the next few years, many businesses will be investing consistently in R&D and skilling of the personnel to ensure keeping pace with the rapid change in technology and aspirations. These are the imperatives for business continuity and long-term sustenance. Businesses are now looking at manufacturing operations’ safety as a priority along with a zero-defect culture.
The two- and four-wheeler industries are witnessing significant changes too. This has necessitated manufacturers to get back to the drawing board stage. The focus, therefore, is on engineering resources and enhancing design and development capabilities. Similarly, despite India being a price-sensitive market, today, we see a major emphasis being put on the safety of vehicles.
Today, crucial local investments and FDIs are being made in the Indian manufacturing industry. To mitigate risk, businesses are looking to transition from China to India. Many new joint ventures are being established with global leaders, which will further help in creating employment opportunities for the large youth population of the country.
All these put together gives India an opportunity to achieve its manufacturing targets. Hence, it can definitely be concluded that the Indian manufacturing sector is currently on the right path. With resilient manufacturers and consumers, the industry is overcoming the bottlenecks, and continuing to be significantly contributing to India’s growth story.