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AUTOMOTIVE Revamping to current needs: Analysing the automotive sector post-COVID

Jun 10, 2020

The automotive sector is amongst the industries which has felt the side-effects of the lockdown the most. It is essential for the industry to understand how they can revive itself now, since Unlock 1.0 has been implemented. The column, M M Singh, Executive Advisor, Maruti Suzuki India and Chairman, Virtual International Automotive Manufacturing Summit, analyses the current situation of the automotive industry and how and what revamping can help the industry revive itself quicker.

The manufacturing industry, specifically the automotive manufacturing, has been amongst the most affected sectors at present due to COVID-19. The recovery from the effect of the pandemic will majorly be demand-driven. All OEMs are equipped to produce as per the demand of the market. However, in the current scenario, an automobile purchase may be amongst the last priority for any customer. Even in the prevailing uncertain times, Maruti Suzuki retailed around 18,000 vehicles in the month of May. This can be considered as a positive sign that the customers are willing to buy. Besides, the idea of travelling in a ‘private vehicle to work being the safest option’ might push the demand once the economy starts to stabilise. Additionally, with the air on the BS VI settling and the government taking a stand on no registrations of BS IV taking place, it has reduced the dilemma in the minds of the customers.

The industry needs to open up/widen its perspective of selling and making cars. Purchasing a car, which was already driven by an online medium, now with the impact of coronavirus, will further increase. Customers now, if at all step into the showroom, will come with a prepared mind on which model and what variant they want. Our internal study demonstrates, out of the 28 touch points that existed in the pre-COVID era, 21 are already being done digitally. Similarly, on the manufacturing end, we expect multiple changes. OEMs may have to work aggressively on making lines agile, digitalise shop floor and multi-skill one’s workforce. The complete value chain needs to be revamped, as per the current needs. The inventory management may also see a rapid shift towards increased inventory keeping by the entire industry.

The automotive industry is already quite digitised. The assembly lines are equipped with the necessary fool proofing, automated inventory management and communication between different systems to produce the car. Without these in place, the industry would not have been able to produce 100+ variants of a single car with utmost quality. The key to industry upgradation is multi-skilling of the associates. They need to be agile just like their systems and should be able to work and align as per the new industry normal. Also, with the ever-changing technologies in the auto industry, reskilling is a must. Upskilling is essential in the current scenario, too, as we are really unsure of the number of people being present on any given day due to issue of containment zones. Given the volatile scenario, an associate would not know on which station or which process he/she would be working on any given day and should be ready for any type of change. Upskilling needs to be done on the job. The industry norms for multi-skilling used to be ‘one process ahead of his/her process and one process before’, but now, the multi-skilling should be at least ‘three stations ahead & three stations before’.

The silver lining from the present situation for the industry is the consolidation of the industry, which will improve the quality levels and allow fresh ideas to come in. Also, the impetus on making India ‘Atmanirbhar’/self-reliant by the Indian government will enable a lot of home-grown industries to prosper. Even though EV has reduced the entry barrier for the auto industry for a fresh entrant, we will be seeing a lot of new entrants in this industry. Also, India, which was an alternative to China till now, will become a major choice for a majority of the foreign players.

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  • M M Singh

    Executive Advisor

    Maruti Suzuki India &

    Chairman

    Virtual International Automotive Manufacturing Summit

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