How COVID-19 is Accelerating Digitisation in India’s Automotive Industry?

Digitization

In the time of crisis caused by the COVID-19 outbreak, no one industry worldwide is immune to this pandemic. The outbreak has impacted every business across industries, especially the automotive sector, delaying operations and disrupting supply chain networks. Despite being affected auto manufacturing processes, the industry is now resuming aggressively by looking at innovative ways. In such a situation, returning back to the work without proper preventative measures could damage the entire business. Thus, thinking digitalization and leveraging technologies like automation and robotics could reduce overloads from certain works human workers used to perform, increasing productivity and warding off the chances of future plant shutdowns.

In terms of volume, India’s automobile is the fourth largest sector in the world. But with the onset of COVID-19, the industry has sent back to four to five years. As per the data from the Society of Indian Automobile Manufacturers (SIAM), sales of almost each of the vehicle segments, including commercial vehicles, passenger vehicles and luxury cars, clocked in the fiscal year 2020 are at the same level as the fiscal year 2016. In FY20, domestic sales of trucks and buses stood at 7.17 lakh units, which is the same as FY17 that had seen sales of 7.14 lakh units.

The outbreak of COVID-19 has also created a new set of challenges on the shop floor for the country’s automotive OEMs (Original Equipment Manufacturers). It has slowed down demand and impacted labour availability aside from flagging health and safety concerns. Moreover, given the situation of the industry, experts are very optimistic about the sector to bounce back, with leveraging digital and advanced technologies. On the other hand, some are seeing this pandemic as an opportunity to drive innovation.

Managing Director and CEO of VE Commercial Vehicles, Vinod Aggarwal said, “All these concepts like IoT, AI and digitalisation will become extremely relevant going forward and are going to define the new way of working. This lockdown provides us an opportunity to adopt these new trends, especially digitalisation.”

The report, titled ‘EY Digital Manufacturing India Survey 2019’ also noted that digital may be an ideal option to enable manufacturing and supply chains to build strength and adapt to the new normal. For the auto industry, investment in digitisation of manufacturing should be viewed as a risk mitigation technique, the report noted. As digital adoption on manufacturing shop floors in India is in its infancy, according to the report, just 23 percent of the large manufacturing firms in the country have a clear digital strategy. However, the automotive shop floor, unlike other industries, is leading in the adoption of emerging technologies, such as physical robots, Automated Guided Vehicles (AGVs), Machine Learning, and Predictive maintenance.

Digitisation is likely to assist OEMs and auto component manufacturing companies to mine data to help them analyze past events and boost their productivity. The data can also be utilized for gleaning information that can help make smarter decisions and envisage future events, EY report noted. Embracing digitisation may also address the strategic imperatives like preparing for volatility and variables, reinventing manufacturing and supply chain, and evolving workplace models to lure talent.