The Indian auto industry is one of the largest in the world and it accounts for 7.1 per cent of the country’s Gross Domestic Product (GDP). According to Brand Equity Foundation the two wheelers segment is said to be the leader in the Indian Automobile market with 81 per cent market share owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets has further aided the growth of this sector.
The overall Passenger Vehicle (PV) segment accounts for 13 per cent market share. India is also a prominent auto exporter and has strong export growth expectations in the near future. In April-January 2016, exports of Commercial Vehicles registered a growth of 18.36 per cent over April-January 2015. As per Indian brand equity foundation, several initiatives by the Government of India and the major automobile players in the Indian market are expected to make India a global leader in the Two Wheeler (2W) and Four Wheeler (4W) segments by 2020.
Sales of passenger vehicles had increased by 16.7 per cent to 258,000 units in August 2016 driven by better-than-expected monsoon and strong buying sentiment*. Sales of commercial vehicles grew by 1.53 per cent to 52,996 units. The two-wheeler industry also performed well. Motorcycle sales grew 22 per cent to 1 million units, while overall two-wheeler sales grew 26.3 per cent to 1.64 million units.
Globally, companies are pouring money into the Internet of Things, and one area of particular interest to investors is “IoT Connected cars”. According to the Business Insider, automakers have been constantly noticing the growing trends with significant business opportunities for connecting their cars. It is expected that 381 million connected cars would be on the roads by 2020. This is up from 36 million in the year 2015. In addition connected cars will generate $8.1 trillion worth or revenues between 2015 and 2020.
Nowadays automakers connect their vehicles in two different ways: First is Embedded connections i.e cars use a built-in antenna and chipset. Second one is Tethered connections which are used in hardware to allow drivers to connect to their cars via their smart phones. Furthermore, app integration is becoming commonplace in today’s vehicles. Google Maps and other navigation tools have begun to replace built-in GPS systems. As per Markets and Market, the automotive IoT market is expected to grow from USD 15.87 Billion in 2015 to USD 82.79 billion by 2022, at a CAGR of 26.75% during the forecasted period.
The connected vehicle has been the most visible and familiar example of the IoT technology. But as cars become increasingly software-driven, the real IoT developments in the auto industry are behind the scenes, as automakers and software providers both lay claim to the driver’s seat.
Gartner predicts that by 2020, more than 250 million vehicles will be connected globally, with the number of installed connectivity units in vehicles worldwide increasing by 67 percent and with consumer spend on in-vehicle connectivity doubling. Deloitte’s consumer research suggests that drivers of the next generation want their cars to act as smart phones on wheels. They would like to remain connected and productive while on the go, consider fully connected vehicles among the most beneficial futuristic technologies.
Moreover, they would be ready to pay a sizeable amount for a vehicle that meets all their technology needs and wants. As IoT technologies and services transform the automobile ecosystem, this ecosystem is witnessing a steady influx of new players and a continued evolution in the roles of key stakeholders and the balance of power among them.
Of particular interest is the evolving relationship between automakers and software providers. Each has a viable claim on the driver’s seat in the rapidly changing auto-industry ecosystem, even as each new generation of services promises to throw into question just how long one might have their hands on the wheel and can keep them there.
In India the Government encourages foreign investment in the automobile sector and allows 100 per cent Foreign Direct Investment (FDI) under the automatic route. The Government of India aims to make automobile manufacturing the main driver of “Make in India” initiative, as it expects the passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.
The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric and Hybrid vehicles in India, under the National Electric Mobility Mission 2020, to encourage the progressive introduction of reliable, affordable, and efficient electric and hybrid vehicles into the country.
The Future of IoT will become increasingly important in transportation and logistics in the next several years, especially as self-driving cars hit the road in increasing numbers. But this is just one area that IoT will totally transform according to Business Insider intelligence. Nearly all sectors across industries would be impacted by the IoT revolution and we have to see how this revolution transforms our day to day lives in the near future.
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