By: Shashwathi Bhanukumar
The strenuous transition to BS-VI in 2020 will be followed by the move to electric vehicles, and shared mobility. People are still apprehensive about the viability of EVs. Shared mobility will not affect sales but generate two separate streams of cars and increase accessibility to mobility to many more people. Big Data will help customisation, the key differentiator of the industry which is riding the road of the AMP 2026 to a more rewarding and exciting future, Pawan Kumar Goenka, Managing Director of Mahindra & Mahindra Ltd told Shashwathi Sandeep of Automotive Script.
Pawan Kumar Goenka, the Managing Director of Mahindra & Mahindra Ltd, is a name that every person in the auto industry knows and respects. Anyone, who is even remotely associated with the automobile industry, treats every word of his as ‘sacred’.
So, when it is our anniversary issue, who better to ask about the trends of the automotive industry than the man himself! We caught up with him on the sidelines of FISITA World Congress, which was held in Chennai recently, and asked him about the tends that he foresees for the Indian automotive industry and also a bout the importance of university-industry interface and the role of Big Data for future vehicles.In the candid conversation we had with him, about the emerging trends in the automotive industry, he said: “The mainstream industry will be busy in 2019, preparing for BS-VI in 2020. The amount of work and the amount of effort going into meeting the April 2020 deadline are mind boggling and only who are doing that can understand their magnitude. Everybody is busy 24×7, and a lot of focus of the mainstream industry will be there.
Impact of BS-VI
We asked him about the impact BS-VI is going to have on the automotive industry and how well-prepared are we for it. He answered without hesitation that, “When we started or rather when it was announced, there was a lot of hue and cry about the shortage of time as we were skipping BS-V. The Government of India was firm and the industry accepted it When you have a gun pointed to your head, many things happen. Most of the industry is ready or going to be ready for BS VI just in the nick of time. Nobody is going to have the luxury of having complete fleet ready for BS-VI before the midnight of March 31, 2020.1 hope there would be no change in this deadline.” The impact of BS-VI will be in terms of price increase. If we had another year or a year and a half to work on it, we would have done more and reduced the price impact But, we have managed to reduce it from where it was three years ago; that’s true for the whole industry; not perhaps to the level we could have if we had an extra year. So, the cost impact will be there, which will have to be passed on to the customer. Therefore, there will be two things that will happen. There would be some pre-buying before BS-VI gets implemented and there would be, perhaps a slow period that will happen for three to six months; then everybody will get used to the new reality and life will move on.”
About the trends that would follow BS-VI, he said, “The new-age industry, and perhaps some section of the mainstream industry, is working on life beyond 2020 which will definitely move more towards electric vehicle (EV). My view is that achieving 30% electrification by 2030, if all concerned -the suppliers, the OEMs, The GOI, the shared mobility service providers, the fleet operators, and the customers – put their mind to it, is doable. If we can do it, it will be great for India, in all aspects, especially in terms of environment and oil import So, that is one change that will definitely happen.” When we talk about EVs, the question about people’s perception comes up almost immediately. To the question, has the perception really changed or is there much more to be done in this regard, Goenka replied, “I would like to say Yes, but I cannot I don’t think the perceptions have changed much yet; people believe that EVs are good to happen, but they are not ready to be the first ones to adopt it; they want somebody else to do it. Everyone would like 99% EV but they will not go for EV. So, the reason I’m saying that there are still apprehensions whether EVs will suit their lifestyle. The feeling what happens when I’m suddenly out of charge, is still there in a very strong way. A feeling whether my car will last four to eight years is still there; will the battery conk out in two years and then what happens? Do I have to spend lakhs of rupees to replace my battery? These fears, though reduced, have not yet gone away. So, I think we still need three to four years for confidence to come in before people don’t worry about EVs as something that they want or not,” he said.
Speaking about the next big trend, he said, “I am not calling it a 2019 change; I’m calling it a change over the next 10 years, and that will be shared mobility. There is no doubt that shared mobility will become the order of the day. Shared mobility does not mean that the growth will stop; that is where the difference is. It is being perceived that once people start opting for shared mobility, the automotive industry may slow down. This is not true, at least in India, because what India needs is accessibility to mobility. Today, probably 10% of them have access to mobility, 90% don’t Shared mobility will bring this 90% to its fold, giving them access to mobility. Therefore, many more cars will get sold. Cars will be put to use even more, in the sense that cars which are used for three to four hours, will be used for 16 hours a day. But, it will provide mobility to a lot more people.” It doesn’t mean that the vehicle sales will slow down. What it will mean, however, is the kind of cars for the shared mobility area will be different from the cars which are designed and manufactured today.The focus and the priorities could be different, what will be attractive to the buyer will be different. Therefore, it seems like two streams of cars will emerge-the stream that will be used for shared mobility and the stream that will be used for personal ownership. These are the two different kinds of cars. That is what will happen in the next five to ten years.”
Since we were at FISITA World Congress, the first in India in its 70-year history, we asked him about the importance of university-industry interface and if the engineers of today are ready for the challenges of tomorrow. “My answer is different from what you will hear from most of the people. I would say No. I think it is a wrong expectation from the industry that an engineer coming out of an engineering college, from day 1, should become productive in doing the kind of work that they need him/her to do. Why I say this is because different industries need different things from an engineer. Automotive industry needs something. Skill industry and, say, the chemical industry need something else. A college cannot prepare the students for all the industries. What we need to have is the basic engineering skills, which the good colleges do impart What we need to have, more than the skill, is the ability to gain knowledge or information and to use them when needed. Twenty or 40 years ago, when there was no Internet, website or Wikipedia, you had to look for other sources for information. Now, you don’t need to; I need the student to be able to go out and learn when the need arises, rather than knowing everything in those four years of college. So, ability to be a holistic person, a person who understands what impacts what, a per-son who is able to connect the dots, a person who can seek knowledge when it is required, is more important than knowing about how a wheel rotates in a car; it’s my job to show them how a wheel rotates in a car, not the job of the college. But, if he does not know what a wheel is, then there is a problem. What I’m trying to say is to make the student more complete, and more holistic. Ability to know is what is needed,” Goenka said.
He was also very quick to add that the college is not the end-all for dissemination of knowledge. “Now, an engineering degree is a four-year course, and these four years are not enough to learn everything. Therefore, colleges have to pick and choose on what they need to do. One of the things that needs to be improved is hands-on experience. Therefore, the summer internships have to become more meaningful. That time has to be used very carefully, for them to get hands-on experience. The projects that used to happen 20-30 years ago, have become somewhat diluted now and real hands-on projects do not happen; that has to happen a little more. But, other than that, I think we are quite okay. Again, I repeat it is my job to fill the gap between what the student brings from the college and what we need in our R&D centres,” he said.
Big Data is being considered as a huge disruptor of the Indian automotive industry. We asked him his take on this subject and whether Big Data is here to stay for the long-haul. “When it comes to connected cars, it is all about Big Data. How do you use that information to provide a better service to the customers, is going to be the differentiator between the company that is doing well and a company which is not doing well. It will probably not be as much in the car that you make; because the car that you will make, everybody will have fuel-efficiency within plus or minus 2%, everybody will have comfort plus or minus 2%, price within plus or minus 3%; it is the customized service that you provide to your consumer and how well you use the data for that is post-sales. But, pre-sale, pre or during manufacturing or during design development, again the amount of information that you can get about consumers on what kind of cars do they need from Big Data, is tremendous. Human mind is not able to comprehend all the data; a well-planned artificial intelligence-based, Big Data-based algorithm will allow us to design the right car for a customer,” he said. So, that brought us to the final question: What do you think the future of Indian automotive industry is going to look like? Goenka said: “There is AMP (Automotive Mission Plan 2026), which is a blueprint that has been jointly developed by GOI, the OEMs and components industry, where we have certain targets for revenue, GDP, volumes, and the number of people to be employed. I believe that we are on track to achieve those targets: about $300 billion revenues, and about 11 to 12% CAGR over a period of 10 years. There is no reason for us to believe that Indian auto industry is anywhere near stagnation and there is a huge demand and aspiration to have mobility control in my own hand and that will ride the growth in the industry.”
“A lot of changes are happening in the industry; you will see products improving. In the last 10 years, the products have improved like what may have taken 20-30 years in other places, and you will see the future changes happening at the same kind of speed; changes are happening in terms of light-weight products, safety, emission, EVs, hybrids and cleaner fuel – a lot of talks are going on about bio-diesel and bio-CNG. All these are going to come in. So, it is going to be exciting and rewarding times for the Indian auto industry,” Goenka said, before signing off.