What are your thoughts on ACMA Automechanika New Delhi 2024 and the Bharat Mobility Global Expo?
We are very excited that India is hosting an event of this scale. Generally, such events, like CES, happen in the US in the early part of the year and then in Europe. In Asia, similar trade events tend to be held in China. However, even those are dwarfed by the size of the event held in India this year. I think it is important for our country to have an exposition like this. For many years, there used to be the Auto Expo shows at which we participated. But what makes this year different and the big shift that we have experienced is that the entire mobility ecosystem is being represented under one roof. As the automotive industry and vehicles become more technology-driven, what is important is that the aspect you cannot see – the software – has been given prominence. Indeed, software will be the key differentiating factor in the automotive industry in the future. From this perspective, the Ministry and other automotive industry stakeholders were very keen to demonstrate the country’s technological expertise. As a Member of the NASSCOM Executive Council and Chair of its ER&D Council, I can say that our company is committed to accelerating automotive engineering, research & development (ER&D) in India. Therefore, I am very happy since this is the first time something like this is happening in India.
What do you see as the main trends in the automotive industry in India?
A little over four years ago, we decided to focus only on automotive and divesting everything else. This is because we saw the significant disruption happening in the automotive industry and we wanted to play a meaningful role as global leader in this space. No one else had the capability and expertise to do what we were doing. That is when we started, and the last four years have been phenomenal for KPIT. We have emerged as one of the largest players in automotive new technologies related to autonomous, electrification, OS etc.
The first point to understand is that the digitization of the car and the increase of software content in the vehicle is a long-term change and we have a role to play, indeed a much bigger role to play than we do today. The entire automotive system is transforming and will require software expertise. Automotive software services are different from IT services, requiring capabilities that are more domain-focused and more complex. This is an area where we can scale up. The second point is that India is a growing market. The third point is that there is a huge dependence on China. Here is where India can play a balancing role, can lessen the overreliance on the Chinese market, and can establish itself as a major player, globally. Several reports indicate that ER&D exports are currently at $46 billon and will increase to $150 billion in the next 15-20 years. Considering this kind of 3X growth, I believe we can play a pivotal role in ER&D exports. This will also drive the manufacturing economy, which is dependent on technology. Being a leader in this space, specifically in automotive tech, we will work towards boosting our ER&D profile. That said, we are very excited about India-focused opportunities.
What do you see as being key growth drivers in the automotive market?
I think there are three parts to this answer. The first is software content. The amount of software is increasing significantly even as the cost of software in vehicles is rising every year. Secondly, there is as much inside the car as there is outside it because of vehicle connectivity technologies. So many more services are being enabled by vehicle connectivity. Thirdly, in earlier times it was all about selling the car. Now it is about selling services to consumers across the lifecycle of the vehicle. So that is also a big shift.
Every country goes through economic cycles. In India, we have young people with disposable incomes. We are already the fourth-largest automotive market in the world. So there is scope for robust growth in our industry because of increasing GDP and per capita incomes.
Are there any specific domains, products, or services on which you are focusing?
It is all about transitioning mobility into becoming a clean energy industry. This is a very important theme that aligns with our commitment to zero carbon. Our vision talks of a cleaner, smarter, safer world. The general focus on sustainability is being mirrored in, say, alternative fuel use. Here we are seeing new technology development in the form of novel battery chemistries, hydrogen fuel cells etc. Connectivity is another area where rapid progress is occurring; 5G is everywhere. From another perspective, young people tend to use tech more and are keen on sustainable transport alternatives. So from multiple angles, there will be innovation and growth.
What would the industry need in terms of support?
Firstly, we would like to see bigger and better branding of India as an engineering player, not solely an IT player. At NASSCOM, we are working on this issue. Secondly, that there is a greater focus on educational institutions in terms of improving and investing in labs, infrastructure, research and development initiatives, and strategic collaborations, among others. Thirdly, expanding incentives beyond the manufacturing sector to embrace technology that is being made-in-India. Most sops today are for manufacturing but if they can be extended to technology that is innovated and developed in India, then this would provide a strong growth impetus.
Where would you like to see the Indian automotive industry in the next five years?
We would like to see the Indian auto industry move from fourth position to becoming the third largest automotive market in the world. In parallel, we would like to see India emerge as the technology backbone of the global auto industry. As for our company, we have achieved good things till now. We want to push to becoming the software integration partner of choice to the global mobility ecosystem.
