Collaboration Opportunities for Global Tech Suppliers In the Indian Automotive Market
Even a small shift in an existing technology creates the room for technical handholding and collaboration. Imagine the strong demand for technology when almost everything in automobiles is undergoing radical changes! Indian automobile sector has undergone major facelift in the last couple of decades and for past few years, the speed of introducing new features, introducing new technologies and safety upgrades has been tremendous. Automotive component companies in India depend a lot on technical collaborations with global tech providers to accomplish these technology shifts in many areas.
For the past few years, the lookout for tech providers has become more intense and urgent as some major transitions await, from conventional engines to Electric Vehicles being one of the largest of them. While the potential for tech collaborations is huge in the electric vehicle’s domain, that’s not all. Even for the conventional vehicles, India as a market offers unique challenges and manufacturers are always looking for technology-based solutions to solve them. In this article we will take a look at where such opportunities exist.
The information presented here is based on our study of multiple reports out there in public as well as our interactions with different stakeholders in the Indian automotive market.
Major Opportunities for Technical Collaborations:
Here are the sectors/domains that offer most of the technical collaboration / licensing opportunities for global suppliers in Indian market:
Moving from conventional vehicles to electric vehicles is going to be a drastic shift, especially in India where central and state governments are proactively pushing for electrification. While a large number of Indian manufacturers are working on launching their EVs, the EV ecosystem is in the stage of nascency. For EVs to gain a volume, cost reductions are imperative which will happen only when powertrain electrification components & software will be available locally at an affordable cost. Motors, controllers, BMS, sensors and many other components and associated technical expertise is indeed required and opportunities exist for global suppliers of these technologies.
Building robust charging infrastructure is integral to wider EV usage. While India has large players like Tata Power working towards developing charging infrastructure, their implementation partners will need a large number of specialised components like switches, relays, connectors, insulation etc. for which technology inputs are needed for certain sophistication levels.
As per a report jointly done by ACMA and KPMG, Tier 1 suppliers have been working closely with OEMs on the light weighting front. The challenge is to bring this capability to Tier 2 and 3 levels as well. India being a price and hence mileage sensitive market, light weighting has been a priority of almost every OEM and Tier 1 in the country. Opportunities wait for global technology providers having a solution to tie up with Tier companies and help OEMs achieve their goals in this context. Light weighting also calls for supply of specialised materials, alloys, dies & moulds, forming know-how and technology.
Telematics in India is in its early stages of growth. Telematics plays a crucial role from safety as well as infotainment point of view. Telematics involves a parallel supply chain of its own comprising components like engine interfaces, GPS receivers, alarms and buzzers etc. As per a Deloitte report, Indian consumers are much more willing than many of their counterparts even in advanced countries, to pay an additional amount for connected features in their cars and manufacturers are looking for technologies related to connected features which necessarily involves telematics.
If we go through the above drivers of technical collaboration, we will realise that electronics occupies a major chunk in all of them. Our interaction with multiple stakeholders indicates strong inclination towards technical collaboration and alliances for electronics. As per the ACMA-KPMG report, the electronics manufacturers are targeting for India specific components for customised design solutions such as integration of Low-dropout regulator (LDO), Microcontroller (uC), High- Side/Low-Side driver (HS/LS drivers), Controller Area Network Physical Layer (CAN Phy) ), Application- Specific Integrated Circuit (ASIC )/ System-on-Chip (SoC solutions), scalability of two and four-wheeler segments, design and validation.
Just as automotive technologies are undergoing major shifts, the field of manufacturing itself is going through shifts of paradigm. Smart manufacturing and Industry 4.0 technologies have potential to make automobile manufacturing cost-efficient, agile and productive. Most of the manufacturers are looking for collaborations for predictive maintenance, digitisation of manufacturing, rapid prototyping and asset monitoring. Technologies like machine learning, business intelligence, automated analysis, cobots, blockchain will find considerable demand in the automotive sector in India.
The bigger picture: Based on our interaction with representatives of multiple leading auto component suppliers, here is a compilation of products and components for which they are looking for collaborators.
Please write to me at firstname.lastname@example.org to know more about the opportunities in Indian automotive ecosystem.