Future of the Automobile Industry in India

Is there a growth future in the automobile industry in India?

When the pandemic hit India, it proved a disaster for the global economy and humanity. This led to a lockdown pan -India. The automobile industry in India faced a major hit, with significant delays from production to delivery. A majority of companies depend on R&D (research and development) to maintain core functions and potentially gain back growth.

Post-pandemic, the grass is getting greener for the automobile industry. India is ranked the fourth largest in the automotive industry as per the 2021 statistics. It is expected to reach 16-18 trillion by 2026.

How do OEMs support dealerships?

Dealerships will be given incentives to increase online showrooms.
Rewarding dealerships financially for conducting maximum test drives and many more service
subscriptions.
Providing consultancy services to their network of dealerships to offer expertise whenever required.
Checking dealership network is properly distributed and that they are providing service to the correct areas.

To summarize, most car makers have opted to boost their digital platforms. Most dealerships are now connected via the OEM (Original Equipment Manufacturer) Online Network.

Considering the KPIs (Key Performance Indicators) in the OEM-Dealer relationship are established, then, the focus can be shifted to experiences rather than transactions.

Future of the Automobile Industry Online

Earlier, maximum customers would research and compare automobiles before making a purchase, spending long hours at the showrooms. But when the pandemic hit the world, the number of online purchases of cars rose. This was because of an upsurge demand in for contactless test drives, paperless documentation, digital financing, and home deliveries.

Working in top gear

India is the largest tractor manufacturer, giving them a dominant position in the global heavy vehicle markets.
Currently, the automobile industry accounts for 49% of India's manufactured GDP and 7.1% of the country's overall GDP.
India's passenger vehicle market is anticipated to rise by 16%.
More than $222 billion is spent on the automobile industry in India, which accounts for 8% of all exports and 7.1% of total income.

Benefits of Automobile Online

All brands in one place - With the use of online, a company has the benefit to target all types of customers. It gets easier for customers to choose and compare various vehicles of different brands on the same platform.
No geographical barriers – Customers do not have to travel far to get a test drive or view the car. Everything can be done, just a click away.
Cost cutting and simplifying operations- Earlier, until there was space in the warehouse, the dealers could not add more vehicles. With this setup, dealers can add stock to their inventory without blocking any space at their premises. The vehicle will physically remain at the factory.
Leasing option- Customers don’t need to own the vehicle, it can be leased.

The current Situation

With the advent of electric, autonomous, shared, and connected vehicles, the automotive industry has seen a significant transformation in recent years. The development of technology has altered how we perceive the world. The younger and more technologically advanced generations will play a significant role in this sector's evolution. They would be crucial in propelling the automotive industry's change. These are a few of the trends that we can expect to see in the upcoming years.

Electric cars
Automated or driverless vehicles
connected vehicles (with intranet, Apps)
sharing a car (carpool, car rentals )
Potentially becoming one of the biggest in the world is the Indian auto sector.
India is currently the world's top producer of two-wheelers.

Introducing solutions into the automotive industry

Recognize the demand for higher-quality automobiles and quicker R&D development in the market of today. The need for better automobiles in terms of comfort and durability has increased due to infrastructure development over the previous ten years in the Era of Highways and Expressways.

Scope Of Franchising – Future of Automotive Industry in Tomorrow’s Online World

Manufacture Franchise – A lesser-known structure of franchising. Their focus is on the manufacturing of a product’s lifecycle. They have a right to manufacture a franchisor’s product and have the right to sell and distribute the products as well.
Product Franchise- They are purchasing the right to sell or distribute a particular product from a manufacturer.
Business Format Franchise- One of the most common franchise structures. More than just producing and distributing a franchisor’s product, they are moreover, buying the franchisor’s business operation model, by which they get to acquire all the rights.
Single-Unit Franchise- This type of franchisee purchases the right to own and operate one franchise location.
Multi-Unit & Area Development Franchise- In this type, the franchise owner-manager has to manage more than just a single-unit franchisee. The multiple-unit franchise owner manages the multiple locations while the area development franchise owner owns a single franchise unit that has access to do business across a vast area like multiple cities, and states.

We spoke about the franchising model types but is there a scope for it in tomorrow’s online world, let’s see.

For many consumers, visiting a car showroom is no longer appealing. They prefer to have digital interactions, where they get contactless sales and service. Therefore, the focus today is customer experience.

Keeping pace with new tech-led, data-rich, electric vehicle manufacturers is the key takeaway, as they have an upper hand in today’s world of automobiles. Companies like Tesla have already tapped this market, where a customer can buy a car in less than 10 clicks from the comfort of his house.

Conclusion

One of the key sectors driving India's economic expansion and one with significant involvement in global value chains is the automobile industry. The development of this industry has been aided by the government's strong backing, which has allowed it to forge its route in India's production of electric scooters. The country produces cars specifically to meet the needs of low- and middle-income segments of the population, setting it apart from other auto-producing nations.