Indian automotive industry: Challenges and solutions

The entire global automotive industry is undergoing a shifting change because of the need for clean vehicles and the path-breaking technological innovations of the autonomous kind. The Indian automotive industry could afford to move slow on the developments regarding autonomous vehicles but it is imperative for it to catch up its pace in the clean vehicles department and adjust itself to the dynamism of the market
The India automotive industry is going through many rudimentary changes with new and stern emission rules, high taxes, the absence of infrastructure and also the absence of any policies from the government for building the infrastructure for the-need-of-the-time cleaner vehicles like charging stations and clean fuels and the still unclear demand for Electric and hybrid vehicles from the consumers.
Here are some of the problems that haunt the industry at present date:

High rate of tax under the new GST tax regime uncertain government policies:

A staggering 43% tax has been levied on hybrid vehicles. This has affected the investments that major car makers had made in producing hybrid vehicles. Such high rate of tax will discourage manufacturers and also, consumers. Also adding to the chaos is the government’s decision of making electric vehicles dominant mode of transport from 2030.

High rate of 43% get was imposed on hybrid and electric cars.
High rate of 43% get was imposed on hybrid and electric cars.

Regulatory changes:

The BS-III complaint vehicles were banned some months ago. The ban imposed a burden of unsold stock on OEM’s. In the next three years, BS-VI emission norms will take charge and the companies will be left with insufficient time to recover their investments they made to upgrade to the BS-VI standard.

Indian emmision standards
Indian emmision standards
Unsold stock of vehicles due to change in emmision standards.
Unsold stock of vehicles due to change in emmision standards.

If the Industry wants to cope with these constant changes then it would have one solution at hand: a network of interdependent elements of the industry. This network would connect government, OEM’s, suppliers, service renders, customers, financial services, mobility providers in a value chain.
Such interconnections would bring innovative solutions to the current chaos and bring a sustainable future to the Industry.

Network of partnerships:

  • The Government, with its plans to make India electric by 2030, plays a very important role in building an ecosystem. If the government invested in infrastructure and created a conducive environment for all Electric cars and public transport then the OEM’s would be encouraged to invest in clean vehicles again.
  • Conducive policies for EFC technology would also give a push to the electric dream by 2030. If the government would give subsidies, tax concessions for carmakers wanting to set up plants India, it would give an impetus to the “make in India” drive.
  • The government should put in place a timelined blueprint and an association with OEM’s to nurture the environmental friendly initiative. If it could lend it’s hand to OEM’s in developing clean technology then innovation in the environment friendly solutions would gain pace and India could be electric ready by 2030.
  • Fuel refineries also need to upgrade themselves to the requirements of today’s emission norms. They need to produce superior fuels that comply with the rules. Superior fuel must be made available all across the country. Fuel pumps also need to be equipped with charging points for Electric vehicles. The government could, perhaps, include in its smart city plans to build Infrastructure for charging stations.
  • The most integral factor to introduce clean vehicles in the country would be innovation. To carry out this innovation and develop great in-house capacity to manufacture the electric and hybrid solutions there is going to arise a need for big investments. To share the burden of these high investments, OEM’s will favour to enter into joint ventures with manufactures and equipment suppliers. To develop clean technology, through open innovation schemes, OEM’s could also join hands with auto component makers along both sides of the stream. Inter-sector partnerships would also become essential.
  • Solar energy could also be used to develop the charging stations infrastructure. The government as it is is keen to endorse greater use of solar energy. ISRO presented with an solar hybrid electric car that could charge the car on solar energy on the go.
ISRO developed solar hybrid car that charges on the go
ISRO developed solar hybrid car that charges on the go
  • The present vehicle dealer and workshops would also have to equip themselves with the necessary new technology skills to service cars of new technology. They would also have to invest in infrastructure  and digital tech. Perhaps the government could set up institutions or skill development and upgradation drives.

Creating customer demand:

  • Marketing efforts will play an important role to take the clean vehicles to the customers and create demand for them. Right now there is uncertainty about the demand patterns for Electric and hybrid cars.
  • Many car makers are already manufacturing smart cars. They can accumulate the data gathered from these connected vehicles and with advanced analytics gauge the demand patterns for a long run electric car strategy. Smart cars will have a string attraction from the new generation and would make better selling options than mere electric units.
  • There will also be a rise in ride-hailing services like Ola and Uber where people would prefer leading car than owning it.


The need to bring in clean environment solutions to the market and comply with new pollution norms should bring the automotive industry together to co e up with innovations solutions and new methods of business. All the elements that make the automotive Industry should join hands to rise to the occasion and build a sustainable future.




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