Indian Auto Industry – The COVID19 Impact and the Road to Recovery
The Novel Corona Virus was a double whammy as it came at a time when the Indian Auto Industry was reeling under the impact of changing emission norms, waning consumer demand and an overall slowdown in the economy. COVID19 has added to its woes and has decelerated the overall GDP growth forecasts from 5% to a measly 1-2%. However, a strategically planned and concentrated response can help accelerate the recovery and emerge successfully from what can be dubbed the industry’s biggest challenge of the 21st century.
“Plans are worthless, but planning is everything” –
– Dwight Eisenhower
Chalking out a strategy for recovery
With various uncertainties looming ahead of the auto industry, the road to recovery depends on 3 R’s:
(i) Reading the signals
(ii) Re-adjust adapting to the new normal and
(iii) Re-prioritise and replan, focusing on innovations that circumvent the challenges posed by the pandemic.
No doubt, new opportunities lie hidden and waiting to be uncovered within this complex environment.
1.Smart / Shared Mobility
Stringent lockdown and work from home options had heavily impacted the shared mobility space in the past few months. As businesses open up and people start work, shared mobility could see a potential uptick. Shared mobility will be seen as a cost-effective and safer option compared to crowded public transport. Innovations in integrating health data from various sources into the shared mobility platforms, with the goal of ensuring passenger safety, can further enhance customer confidence and propel the demand for such mobility options, turning this into an opportunity for the Shared Mobility providers.
2.The Phy-gital Experience
March and April 2020 saw an unprecedented fall in sales in the consumer vehicle segment in many brands. However, with lockdown restrictions lifted and customer sentiments improving, demand seems to be picking up now. Demand for vehicles in the lower segments are seeing a steady rise with health concerns being a key driver. For such buyers, the physical retail experience in most dealerships could also seem to be a risk factor.
“Never let a crisis go waste”
– Winston Churchill
As a legacy of COVID19, we are seeing an increased affinity to e-commerce and smart shopping experiences. It is only imperative that the Auto-industry also adopts this digital experience or a more innovative “Phy-gital” experience enabling customer buy in the comfort and safety of their homes complementing the “Physical” touch-points at showrooms. Enabling contactless purchase and seamless digital payments may be the trends of the future in Auto retailing as well.
3.Align with the Digital era
The digital era demands investment into technology innovations and digital transformation of data platforms to help create truly differentiated products and solutions that usher in the potential to drive future growth. The convergence of data from diverse sources like customer data, vehicle data and social data would all add to the dynamics of newer solutions that have the potential to “Wow” the customer. Data is no longer the oil, but the soil on which future innovations can be seeded and game-changing benefits reaped.
4.Innovative engagement models
Ever-increasing cost pressures push companies to look for optimization opportunities and propel them to innovative engagement models which add value to the engagement. Strategic outcome-based partnerships between domain experts and technology practitioners will help companies successfully leverage the post-COVID remote work scenario while also ensuring business continuity along-side employee safety.
Evolution has often been punctuated with such dramatic shifts and the key to surviving these storms lies in the ability to adapt and re-invent ourselves. And I am sure the Indian Auto Industry will bounce back with rigor to emerge a key contender in driving the growth of the nation as a whole.
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Charles Darwin (1809 – 1882)