Cloud-based solutions and big data are set to drive automation, improve efficiencies and lower costs in the current economic climate | By Prafulla Kharkar |
Over the last 12 months, the global automotive industry has witnessed escalating volatility with sluggish growth in the advanced economies and a slowdown in emerging markets. This volatility was pegged to several different causes, ranging from the global fluctuation of currency rates, energy costs and raw material prices. For the first time in 10 years in India, car sales fell by 5% in the first half of the financial year from April 2013, according to the Society of Indian Automobile Manufacturers (SIAM).While the recent global slump in the auto sector has had an impact on most markets the Indian auto industry has been resilient.
SIAM noted that the industry has had a growth rate of 4.41% as compared to last year, with a total of 1,811,276 vehicles produced in February 2014 as against 1,734,851 vehicles produced in February 2013. The Indian automotive industry has a lot to look forward to, by way of steady growth in both domestic and export markets. Though the economic environment is expected to improve in the second half of 2014, automotive companies still face complex challenges and will have to apply strategic initiatives which can enable efficient, agile and innovative operations.
Processes for marketing and sales in India have been traditionally done manually. Automotive manufacturers will have to become more flexible and cost efficient in developing new and more cost effective products and processes for their customers. There will also be greater emphasis by the supplier on customisation and personalization of their products to meet varying customer demands. In the automotive industry there are incredibly large amounts of transactional data that is exchanged such as invoices, purchase orders and shipping notices, which can be prone to delays and human error. Indian auto manufacturers are increasingly deploying cloud-based solutions in order to standardise processes and lower costs. Cloud collaboration on a common platform can enable auto manufacturers to exchange data securely, swiftly and accurately, streamlining processes and making them more efficient, thereby adding value to their businesses at a fraction of the original cost.
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Similarly, cloud-based big data analytics can offer insights to the automotive industry by tracking vehicles’ performance. Automotive manufacturers are increasingly switching over to advanced connected car IT services and platforms to enable proactive maintenance of vehicles, thereby enhancing the end users’ experience. Big data analytics also help spot trends and gain business insights through advanced data stream management in a highly scalable cloud-based environment. According to a recent report by Ernst and Young, 67% of carmakers and dealers chose car connectivity and infotainment as a key value proposition driver. Given this finding, drivers can expect significant advancements in the driving experience. Auto manufacturers are increasingly focusing on connected cars, which will have many technology enablers for the driver, such as WiFi-enabled dashboard monitors with weather reports and traffic patterns, assistance in locating a parking spot and traffic monitoring to increase fuel efficiency. A connected vehicle could also have predictive diagnostic tools to check maintenance details such as a vehicle’s oil levels or parts in need of repair, which remotely reports to a back-end system. This could prevent any unexpected breakdowns that could inconvenience the driver. These connectivity and infotainment solutions are not restricted to passenger vehicles. In fact, state transport buses funded under the Indian government’s Jawaharlal Nehru National Urban Renewal Mission (JnNURM II) programs are required to have ‘On- Bus Intelligent Transport Systems’. The first ARAI approved ITS compliant to JNNURM II standards has been developed by KPIT. The On-Bus ITS, is equipped with a console, which is configured to display information about the passengers, routes and vehicle health, ensuring the safety and security of both the bus driver and passengers.
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With rising fuels costs and pollution levels, there has been a conscious shift by auto manufacturers towards energy efficient vehicles and hybrid/ electric vehicles. In India, this shift has been reinforced by the recent norms, which have been imposed by the Bureau of Energy Efficiency (BEE), which functions under India’s power ministry. The norms state that passenger vehicles must have a mileage increase of 14% by 2016-2017 and an increase of 38% by 2021-2022, which will rank India among countries like US, Germany, Japan and China. Currently, passenger vehicles in India average 16km/litre. While the imposition of these norms on car manufacturers is still two years away, automotive manufacturers have already started conducting R&D to increase mileage efficiency.
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Another field in which automotive companies are doing a lot of research and development is hybrid plugins. While the best known hybrid car is probably the Toyota Prius, its availability and higher price are challenges in the road toward mass adoption. Hybrid plugins such as the Revolo can transform any vehicle into a fuel efficient and green automobile. With a parallel hybrid plugin, batteries in the car can be charged from a standard external electricity source, enabling it to function like an electric car. However, if the batteries are fully discharged, the vehicle will switch back to operating like a conventional fuel vehicle.
Despite all odds, the Indian market offers enormous opportunities for automotive manufacturers. India has a population of 1.2 billion and according to industry data; the country has vehicle ownership of just 13 per 1,000. Last year, the country produced just over four million cars and commercial vehicles (CVs), which is double the figure from 2006. According to reports from IHS Automotive, sales of cars and light CVs are believed to reach 6-7 million by 2020, up from a predicted 3.7 million this year.
The focus for 2014 will not be pushing for short term profitability; there will be more emphasis on core areas of fuel efficiency, emission reduction, safety, durability, cost optimisation and innovative features that will ultimately pay long term dividends to the industry at large.
