As global markets evolve and electric mobility gains momentum, India's automotive sector stands poised to transform from a regional powerhouse into a significant international player.
04 Jan 2025 | 8277 Views | By Avik Chattopadhyay, Indea
At the first Bharat Global Mobility Show in February this year, the Prime Minister expressed a very significant desire: "I want to see the day when people across the world will want to buy a car designed in India." Most of the media reported it as just a statement, but ...
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At the first Bharat Global Mobility Show in February this year, the Prime Minister expressed a very significant desire: "I want to see the day when people across the world will want to buy a car designed in India." Most of the media reported it as just a statement, but to me it is a clear statement of ambition and intent. It is possibly for the first time since taking the reins in 2014 that the PM has made such a statement in reference to the Indian automobile industry.
Quite simply, he is imploring the industry to go global, work out a blueprint on how to do so and then go about achieving it. There can be few higher achievements in life than seeing an Ashok Leyland bus ferrying schoolchildren in Dallas or Amazon running a fleet of Hero electric delivery pods in Berlin using the MAPPL interface, or the Taiwanese President moving about in a Mahindra born-electric vehicle. While it is certainly a matter of huge pride that India’s autocomponents industry has created a global footprint in terms of operations, acquisitions and business, none will disagree that a certain mobility solution in the form of a product or technology, visible to all, makes the biggest impact.
It will require a combination of design leadership, engineering prowess and brand appeal – a heady mix that certainly seems simple and straightforward on paper, but turns out to be a Herculean task when one sits down to ponder and plan how it can all happen.
Can Indian Auto Inc Go Global?
The answer lies in India’s vehicle export performance. The first half of 2024 has definitely been better than the previous year. Data from SIAM for the last five financial years tells a straightforward story that two-wheelers make up the bulk of what we export. And why not, as we are the world's largest two-wheeler manufacturer and market.
The second data chart, again from SIAM, shows the progress we have made in the first half of FY25 over the same period in FY24. If all goes well, we should breach the 5 million mark by March 2025, which would be no mean achievement, given that we are currently ranked 10th in vehicle exports.
China Exported Nearly 5 Million Cars Alone in 2023!
Not that we need to compare ourselves every time with our neighbour, but it helps to put things in perspective that brands like BYD, Geely, Nio, Xpeng and Great Wall are making a name for themselves across car/SUV/UV markets. Tariffs are being imposed on Chinese four-wheelers in different economic zones, a symbol of their potential to disrupt traditional consumer behaviour.
Just as the world took to Japanese brands in the 1980s, it has opened its arms to Chinese brands, especially the new energy ones, for a combination of reasons and not just price. Where they stand today is an outcome of decades of hard work where the government, industry bodies and automakers have worked towards a position of power and prestige.
Too Few Indian Brands Are Leading the Charge Right Now
In our case, the two-wheelers are carrying the Indian flag far better than any other category. Bajaj, TVS, Hero and Royal Enfield are the "Indian" brands that are being consciously chosen. While Honda, Suzuki and Yamaha also achieve very good numbers, people buy them as Japanese brands, quite oblivious to the fact that they are made in India. Provenance plays a very important role. One consciously chooses a Bajaj or Hero or TVS or RE knowing it is an Indian brand. That creates a huge shift in perception.
When it comes to four-wheelers, Mahindra, Tata and Force are the only "Indian" brands in the market. Maruti Suzuki sells as Suzuki, with no reference to the Indian connection. The main exporters are Maruti Suzuki, Hyundai, Kia, VW, Nissan and Honda. All sell on their provenance of being Japanese or Korean or German. And these brands have export commitments as part of their investments and operations, mandated by headquarters.
One would have expected Indian CV brands to do much better as we have more of them than in the case of four-wheelers. Yet, this financial year, their exports are just around 7% of their total production despite the wide portfolio of products produced – right from micro CVs to articulated HCVs and buses of all lengths.
The fact is that Indian brands are not doing too well right now. It really does not matter which countries you export to at present, as every market is important and full of potential. The Chinese brands globally talked about today started off exploring and exporting to the 'easier' markets in South America, Africa, South and South-East Asia. The legacy brands from the US and EU were more focused on the Chinese market all that time. Rather ironic, is it not?!
What Do We Need to Do to Take Indian Auto Inc Global?
Is it too late? Not at all. The world is going through yet another technology and consumer behaviour upheaval. It is the perfect time for India to plant its flags in the right places, in the right segments and in the right businesses.
But we cannot do what others are doing. We cannot cut-copy-paste any more. While China does China, we need to do things our way, in our inimitable style and demeanour. That will make the endeavour credible and sustainable.
Five things, according to me, can certainly establish Indian brands globally in the next 7-10 years if done with the right intent and intensity.
Define your "Reason-to-Believe"
Just as Japanese brands primarily stand for reliability while the German ones for durability and the Koreans for features, we need to decide what exactly will be the common thread across all Indian automobile brands on the global stage. Will it be economy? Or frugality? Or design? Or flex-fuels?
There needs to be an "export-oriented" product planning and development strategy for the industry, guided and monitored by bodies like SIAM, SMEV, ACMA and ATMA. We need to identify our 'white space' and invest in it full-time. This cannot happen in isolation.
Define the Flagship Product Category
There is obviously an obsession with cars and SUVs, but we need to look beyond these, and decide which specific product category or categories will best demonstrate our RTB as mentioned earlier. It may be the two-wheeler, bus or micro CV sector. One need not always depend on a car or an SUV to build image and business. Focus on these vehicle segments to enter markets upon markets with a clear benefit proposition.
Designed in India, Assembled in...
Yes, the focus is on building India as a design powerhouse. When our Prime Minister made that statement, he meant it wholeheartedly. Design is the climax of value creation. It is both the starting point and the apogee of a truly self-reliant automobile industry.
A talent pool has to be created in the country that will help turn out mind-changing design solutions both in physical and digital manifestations to make the RTBs of the flagship product categories come alive. Invest in design. Invest in design schools. Invest in creating a design ecosystem that, just as IPL did for Indian cricket, creates an unending talent pool that spreads all over the world carrying a unique design DNA.
Set up India Auto Inc Offices Worldwide
Whether as SIAM or under any other name, set up offices of the auto industry in key cities across the world. Use these offices for pitching, lobbying, networking, consumer research and building lasting relationships with the focus country's decision-makers, media, consumer councils, activists, policymakers and lobby groups.
One cannot become a global player unless this minimum investment is made in setting up a sustainable network. As Indians, we are very poor at networking, especially in the auto industry, as we let personal agendas come in the way of collective intent and ambition.
Diplomatic Focus
Finally, all of the above cannot bear fruit unless the government believes that Indian Auto Inc must go global as part of our larger strategy of Viksit Bharat and Amritkaal. This is just how the government in the early 2000s decided for our ITES industry.
Policymakers and private enterprise fused as one on the mission to plant the Indian flag in the backyards of the software world and Silicon Valley. For the auto industry too, it has to be with the same manic intensity.
For that, first and foremost, the policymaker has to see the automaker with true respect. The automobile has to cease to be seen as a 'luxury' product. Each diplomatic mission office has to have a focus on promoting the Indian auto industry. China has been doing that for decades.
Brazil has done it effectively for its aerospace industry. We need to look beyond the traditional commodities such as coal and steel and copper onto finished products and solutions. That way, greater sustainable value can be added to the economy through both employment and consumerism.
Only when we, as a nation and industry, take off our tinted glasses, will we be able to create this new vision: a global Indian Auto Inc. Jai Hind!
Avik Chattopadhyay is branding expert and founder at INDEA. The views expressed are purely those of the author.