The automobile industry during the time of the COVID-19 pandemic has been facing numerous impediments such as the escalation of electric mobility, ridesharing, and the volume of production of cars came to a halt. During that time, global analysts have mentioned that this particular sector would be facing more intricate challenges to regain its growth and momentum like the pre-pandemic level. In the UK alone, the automotive industry contributes more than £15 billion to the economy and turns over nearly £79 billion annually. The closure of travel and businesses all over the world has put a huge strain on the international automotive industry and has deeply highlighted the fragility of the process. Although the industry is recovering at a rapid pace, the hurdle of compressed supply is now more evident than ever and automotive firms will have to face more grave problems in the coming years to return to ‘New Normal’. In this regard, in a video interaction with Amit Jain, Chief Technology Officer (CTO) and Executive Director at Uno Minda, we came to know about the current technology trends in the automotive industry, the upcoming and promising technology, which will be a game changer for the industry, and how India and other countries are tackling the current challenges to uplift the growth of the automotive industry.
Q. Can you please elucidate why Unominda was formed and when? What is your current mission and vision?
Uno Minda is a 65 year old group founded by Shri SL Minda. It started off first as an automotive company, the first product six decades ago was an ampere meter for two-wheeler and from that we have grown into switches, and several other products. Over these last six decades, the journey began from a small factory in a garage and today we are a global conglomerate with 72 plants, nearly 2 billion in revenue, over 24,000 employees, and 20 plus product range. The vision of the company is to be a sustainable global organization which adds value to all its stakeholders and gains technology leadership. We would like to go more global, our 18 percent of sales comes from overseas today and we would like to increase that to 35 percent. We need to have technology leadership if you want to increase global sales and be a sustainable organization.
Q. Since COVID-19 pandemic, how have you changed your business strategies that are helping you stay ahead of the competition? Would you like to share any success stories of late?
This year is probably the new normal year after the pandemic. We have seen strong movement over the last year, sales have reached almost like the pre-pandemic level. Companies have seen demands in both exports and Indian markets although there has been a challenge due to the semiconductor shortage, issues in raw materials availability and high-cost of raw materials. But the pandemic did change quite a few things. Now, we see cost rationalization in detail and we have actually invested at that time in terms of a new product portfolio. We also diversified into new product ranges around that same pandemic time. And this has also helped us withstand the downtrend at that time because we were diversifying at the same time. Uno Minda also worked on several strategies during that time like personalization, autonomous, electrified and connected. Also, in terms of the supply chain, the shortage of semiconductors made us plan and look at inventories, planning, structuring our supply chain, and supporting OEMs. All this has gone through a change. We also adopted digitization a lot more like how we conduct our meetings, see the supply chain and manufacturing. The success story for us revolving around diversification into new products. We created a completely new vertical of two-wheeler and three-wheeler electrification.
Q. What are the current technology trends you are seeing in the automotive industry in India and in other advanced countries? Where is the difference?
Globally, if you look at the technology trends they are all the same and in automotive everybody talks about macro-case like connected, autonomous, electrification, and shared mobility. India is also adopting these trends. Now, if you really look where India stands now, ten years ago the electronic content per car used to be roughly 500 dollars whereas the global standard at that time was 1500 dollars. So, we are one-third in terms of electronic content. For India, the amount of technology adoption is 1500-2000 dollars. In all the adoptions of different technology if you look at 60 percent of all cars today come with touch-screen technology, infotainment, connectivity, premium features such as ADAS and cameras. The rate of adoption has exponentially increased in the last few years. The gap is there is legislation and regulations like calls for certain features be it airbags, safety ratings, India is behind in many of these regulations.
Q. AI and IoT are gaining huge traction in the global automotive industry, but media reports stated that India is long ahead to lead the technology race in this sector? Do you agree with this statement? Which countries do you think would lead the race in this industry in terms of adopting top-notch technology?
IoT is synonymous with the whole world of connected cars and also it applies to supply chains and how automobiles and components are manufactured today. So, industry 4.0 is a classic example of IoT penetration that way automobiles are manufactured today. The connected car adoption has been much higher globally than India. Reasons are also related to regulations. Europe for example has certain regulations in terms of emergency calls. Every single car needs to have an emergency call assistant. However, these adoptions have happened in the shared mobility area and so, ever taxi segment or the commercial vehicle segment in India now mandates to have Automotive Industry Standard 140 or AIS 140 (IRNSS) – an integral part of the Intelligent Transport Systems (ITS) requirements for public-transport and commercial vehicles.
Again when the emergency call assistance regulations will come into force in India then the adoption of connected cars will be 100 percent. We work with various OEMs very closely and what we have seen is that most of them offer cars with connected features and this has become a norm. India approximately has 17 percent of the cars connected today and you will see the upliftment to 45-50 percent by the end of 2026-27. AI is also a matter of features and adoption. India is going to use AI effectively in areas like battery analytics, range predictions, or driver behavior monitoring.
Q. UNO MINDA launched its first flagship center for advanced technologies called CREAT (Center for Research, Engineering and Advance Technologies). What are the benefits of this flagship initiative and how do you think it will be a game-changer for the industry?
CREAT was started in 2017 and it was that time we formed our new vision. Uno Minda crafted the vision of technology leadership, but the point is how do we realize it? When I joined that time I saw that lot of technology within the group or the technology teams within the group were slightly fragmented. They were spread in different businesses, a little bit of mixture in R&D and more applications engineering and hence we took a call as a group in 2017 to actually focus and create a single center that would bring self-reliance in technology leaderships. We started this with five people back then. Today the company has 350 people and started with one small center in Pune. Now, we have four centers in India, one center in Germany and we have grown into several product groups.
Now, the mission of CREAT is very simple. One is to realize the vision of the group and then to innovate for the future of mobility. When we speak about the future, we speak about four macro-trends like personalization where we are tracking cars as a third living space. Then comes autonomous and ADAS. No. 3 is connected and 4th is electrified. We focused more on personalization because our products are like that. So, the whole idea of CREAT is to innovate, develop and design products that Minda does not make today. One is to get into new product areas, which are focused on the base strategy, and as part of strengthening the core we would like to make our products smarter and equipped with more electronic content. Uno Minda wants to move from a component supplier to a system supplier. This year we have filed nearly 97 IPs. As part of CREAT we also have a design studio that focuses on all aspects of creative design, user experience, 3D modeling and HMI design. In fact, we do full vehicle design along with the interior and exterior design.
Q. What is your roadmap for the industry in the coming five years and how Uno Mindo is poised to uplift the growth of the sector?
As far as India is concerned, we track three specific verticals. No. 1 is this whole government initiative around bringing the Bharat NCAP regulation to India. So, the whole safety related NCAP rating system, the voluntary assessment safety program, was brought to India as a game changer. These measures will help us bring us new kinds of products that will reduce road accidents. Also, it will increase the electronic content in kind of harmonizing how the global automotive standard becomes applicable for India. Then we will focus on legislation and regulation. We see the government's target of reducing road accidents to 50 percent by 2030 is a great change. Third, the entire market sentiments are changing. We are going to see a lot more start-ups and new age OEMs coming. Last but not the least, Uno Minda is focussed in bringing India specific use-case technology products not just by copying the global technology models.