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Arindam Lahiri


Automotive Skills Development Council (ASDC)

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AUTOMOTIVE MANUFACTURING SECTOR IN INDIA The future of the mobility sector is definitely ACES

Nov 29, 2021

Today, only about 2% of new vehicles sold globally are EVs which gives a huge opportunity for India to innovate inside and outside the country - Arindam Lahiri, CEO, Automotive Skills Development Council (ASDC)

Do you think India is the next automotive superpower? What role do SMEs have to play in this?

India is expected to be the world's third-largest automotive market in terms of volume by 2026 and is currently valued at $118 billion. Despite the ongoing pandemic, the Indian auto sector has stood its ground and faced the challenges posed by the pandemic head-on. With the recent announcements made by the government on the scrappage policy, product-linked incentives etc, the industry has received a much-needed impetus. These announcements have also benefitted SMEs directly or indirectly.

The SMEs involved in the automotive supply chain play an important role in the growth and expansion of the Indian auto-components industry, which contributes 25.6% to the manufacturing GDP and 3.8% to the national GDP, besides providing indirect employment to over 1.5 million people.

Automotive is one of the core sectors of the Indian economy. How are the automotive companies in India setting the trajectory for India's overall growth? What are the imperatives for the industry?

The automobile industry is a vital player in India’s vision to become a $5 trillion economy. Leapfrogging from BS IV to BS VI standards, mandatory airbags in passenger vehicles, anti-lock braking system (ABS), rear parking sensors, front occupant seatbelt reminders and a mandatory speed alert system to all new models are a few disruptions that have made companies sensitive towards consumers.

Consequently, our exports have risen to the international market. For instance, despite the COVID disruptions, India was the top country of origin for vehicle imports into South Africa. The path-breaking vehicle scrappage policy is another feather in the cap of India’s automotive sector and has boosted sales for automotive and allied industries.

How can India become influential in terms of EVs with robust vehicles and changes in the ecosystem?

The first step to building robust EV penetration is identifying the Indian geography. Furthermore, India is an extremely price-sensitive market, and hence, there needs to be a clear focus on creating the right balance between performance & price.

The mobility landscape will fundamentally transform over the next 10 to 15 years, with the ACES (autonomous driving, connected cars, electrified vehicles and shared mobility) trends. What opportunities does this evolving landscape present to the Indian automotive industry? How does it help it gain a competitive advantage?

The evolving landscape presents a perfect opportunity for Indian automakers to lead the disruptive changes occurring across segments. Today, only about 2% of new vehicles sold globally are EVs which gives a huge opportunity for India to innovate inside and outside the country by making hubs that can help supply complete products or components worldwide. With the growing number of EV manufacturers domestically, the industry is creating a huge opportunity for automotive suppliers on building a strong position in the global EV supply chain. Manufacturers are now signing MoUs with the GoI to ramp up charging and battery swapping infrastructure to ramp up EV penetration.

What does India in 2022 look like for the automotive sector, according to you? What strategies have to be instilled to ensure your organisation is a key contributor to the Indian economy?

The future of the mobility sector is definitely ACES. I believe that established and trusted OEMs may have an advantage as ACES trends accelerate because customers view them favourably. There have been rising trends where consumers now prefer end-to-end connectivity.

As a sector skills council for the automotive industry in India, ASDC plans to ensure an inclusive seamless supply chain of skilled manpower for the industry. ASDC will also initiate specific projects in partnership with industry and institutional partners to encourage diversity in the workforce. We expect apprenticeship programmes will play a pivotal role in creating a strong pipeline of trained manpower.

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