Perpetual Motion

FOR MUCH OF THE 20TH CENTURY, CARMAKING WAS THE “INDUSTRY OF INDUSTRIES”. NOW IT IS REINVENTING ITSELF

- JAYASHREE KINI MENDES & MOLLY R

IN RICH COUNTRIES, THE AUTOMOTIVE industry contributes nearly 10% to the GDP; in India it’s around 8%. But today, in spite of the car industry being one of the largest in the world, investors are pessimistic. As a guesstimate, the industry is sitting on $1.3 trillion worth of legacy investments in factories that rely on a technology that ought to become obsolete—the internal-combustion engine. Now, with car sales collapsing, a dinosaur business that employs 10 million people directly faces a moment of truth. Long synonymous with hubris and the inept allocation of capital, it needs to look to the future.

Much of the focus today is on the electric vehicle. There’s a desperate race to launch and do better than the next guy. However, carmakers also continue to invest in ensuring that the petrol and diesel cars are state-of-the-art and some with some mean gadgets. In the bargain, they are also hunting for the best minds who can inspire them to do better.

ALL THINGS INDIAN

All carmakers are sure of one thing. Investments in technology, backend integration, manufacturing excellence are necessary if India is to become a global manufacturing hub.

SS Kim, MD & CEO, Hyundai Motor India, is bullish on the long-term growth prospects of the Indian auto industry. “We are focusing on aspects like electrification, connected features and autonomous technology as part of our future product strategy. With over $4 billion investments so far in India alone, we are looking closely at digitisation across verticals and focus on mobility services to push growth.”