The automotive industry in India was significantly impacted by the COVID-19 pandemic, with sales falling by over 30%. However, the recent trends in the automobile industry exhibit to be victorious. Thanks to the emergence of fast-paced technological advancements, changing vehicle buyer behavior’s and growing market competition. Due to the entry of many new players, the automobile sector is entering into a revolutionized age. Subsequently, the Indian automotive industry in 2023 is shifting towards ‘sustainable mobility. Moreover, the FY 2023-24 Union Budget announcements have opened up a plethora of opportunities. Further ensuring the transition is quick and far-reaching.
Let’s explore the latest automotive trends that are set to reshape the automotive industry in 2023.
1) Advanced Driver Assistance Systems (ADAS)
ADAS technologies are designed to help drivers avoid collisions, reduce driver fatigue and help keep drivers alert. These technologies provide drivers with additional safety features such as lane departure warnings, pedestrian detection, blind spot monitoring, adaptive cruise control, and automated emergency braking.
ADAS has become an integral part of road safety, and when combined with AI and IOT, it is paving the way for self-driving cars. Whereas this technology was once limited to luxury vehicles, automakers have now made it available in more affordable mass vehicles. In the past month itself, we have seen cars like the all-new 2023 Honda City and Tata Harrier and Safari Red Dark Edition get it.
The recently launched 2023 next-generation Hyundai Verna comprises of ADAs features too. The Indian Government is keen to support the development of Automated Driving Assistance Systems (ADAS). In order to promote safe and efficient transportation across the country. Consequently, the Government has committed to investing in ADAS research and development as well as. Additionally, the government is providing incentives to companies and individuals to adopt these technologies. Ultimately, the goal is to make India a global leader in the development of automated driving systems. And create a safe, connected and efficient transportation ecosystem for all. Moreover, the voluntary adoption of active as well as passive safety features by vehicle manufacturers with a view to enhance GNCAP ratings of the vehicles contributed for the growth of Indian ADAS market.
2) Electric Vehicles
Moving towards Sustainable Mobility, there has been a surge in the demand for electric vehicles. Moreover, its among both the common man and corporates. This has drastically changed the overall landscape of the 2023 automotive industry in India. The government of India has set a target of having 30% of all vehicles in India powered by electricity by 2030. To achieve this, the government has implemented a number of policies and incentives to encourage the use of electric vehicles.
The latest move of exempting customs duty on the import of capital goods and machinery. That’s required for the manufacture of lithium-ion batteries for EVs is expected to provide the desired momentum behind growing EV sales. This will not only facilitate wider adoption of EVs. But also encourage local manufacturing networks and create more employment opportunities. Thus helping to drive sustainable mobility in India. Entry level hatchbacks like the Tata Tiago EV bring EVs to the masses. Further, the multi-crore offerings by the global giants, the Porsche Taycan and Mercedes-AMG EQS 53 4Matic in the four-wheeler segment.
In the two-wheeler segment while Ola Electric secured the top spot by selling 1,51,344 units. Further, garnering 21% of the market share in India. However, Okinawa Autotech, Hero Electric, Ampere Vehicles, TVS MotorCo and Ather Energy were the top OEM’s for FY2023. Other prominent players in this category include BGauss, Revolt, iVOOMi energy and Pure E. The latest entrant Fujiyama recently launched 5 electric scooters, out of which, four are low-speed electric scooters namely, Spectra Pro, Spectra, Vesper, Thunder, and one high-speed model, Ozone+.
3) Internet of Things (IoT)
The automotive industry in India is experiencing a tremendous transformation due to the increasing adoption of IoT technology. IoT technology has enabled vehicles to communicate with other vehicles and infrastructure, providing drivers with an even greater level of awareness and control over their driving environment. The vehicles are now equipped with sensors which collect data and send it to the central server. Resulting in improved vehicle performance based on data analysis.
With the help of IoT, drivers can stay up to date on their vehicle’s performance, receive alerts and updates from other vehicles and infrastructure, and even check their vehicle’s diagnostics remotely. This allows drivers to make better informed decisions on the road, ultimately leading to safer and more efficient driving. Further, fleet management and ride hailing companies extensively use IoT. The Indian Government wishes to further introduce policies which can help in improving GPS tracking, vehicle driver performance and enabling the prevention of vehicle theft.
Some companies have already disrupted their markets with their one-of-a-kind product offering. By introducing features such as Impact-alert Calling, Real-Time tracking and Panic Button. Along with certain vehicle telematics thereby creating an ecosystem that not only makes the vehicle secure, but also promotes responsible driving. Tata Motors’ iRA, Kia’s UVO, Hyundai’s BlueLink, and MG’s iSmart, as well as luxury car manufacturers like Mercedes-Benz. Which offers a connected car app called Mercedes Me are some Apps to look out in this space.
4) Online Sales
The pandemic has significantly impacted the auto industry. Further, forcing it to change its traditional retail focus in order to better meet the needs of the millennial and Gen Z generations. These generations prioritize convenience and rapid delivery, leading to the emergence of the auto ecommerce industry. This shift has seen both Original Equipment Manufacturers (OEMs) and dealers choose to adopt a digital model to survive. Several new Electric Vehicle (EV) brands, such as Bounce and OLA Electric, have adopted a ‘digital first’ go-to-market strategy. Which has resulted in high bookings on their online platforms. Legacy brands from the two wheeler segment such as Hero Motor Corp and Bajaj have also responded to the digital trend by supplementing their offline presence with an ecommerce one.
Before pandemic, only 32% responded positively to online purchases of vehicles, but number rise to around 64% during COVID-19.
Auto manufacturers mostly prefer virtual showrooms as they make sales simple and reduce infrastructural and overhead costs. This allows dealers to offer customers competitive prices and attractive deals. Additionally, dealers now have the ability to increase their inventory by including vehicles that are not on the lot but stored in a factory.
5) Sale of pre-owned vehicles
The pre-owned car market in India has seen tremendous growth in recent years. Moreover, with projections showing a compound annual growth rate (CAGR) of 12-14% over the next few years. This growth is set to continue outstripping that of the new car market. Further, with the market size predicted to exceed 7 million vehicles by FY2026.
The Covid-19 pandemic has played a major role in fueling demand for the sector. Due to a surge in consumer preference for personal mobility. However, other factors have also contributed to its recent success, such as the growth in the amount of established Original Equipment Manufacturers (OEMs) in the business, more inventory levels, a large range of new-generation vehicles available across all segments with warranties, and digitalization that has provided greater transparency and trust to customers. The demand for pre-owned cars has further fueled by the emergence of online platforms. Moreover, platforms like OLX Autos and Quikr, which allow buyers to easily compare prices and features, as well as to negotiate deals.
Conclusion
With the view to meet the ever-evolving needs of consumers, the automotive industry in India is changing faster than ever before. In 2023, we can expect the automotive industry to further improvise on technology. Such as autonomous driving, connected vehicle technologies, and alternative fuel sources. As well as environmentally friendly vehicles on a tremendous rise. Safety, convenience, affordability and green mobility will be the key features to look out for in any automobile enthusiast while purchasing any vehicle in 2023. As more and more people are choosing to purchase sustainable goods.
Moreover, there is a strong likelihood that more automobile lovers will opt for Electric Vehicles (EVs). Additionally, it will increase the availability of charging stations, government incentives, and improved battery technology. 2023, might just be the right year for the automotive industry to change their gears and drive in the green lane.