Key to restart auto sector

If there is one thing that can revive demand in a sluggish market, it’s generational leap in technology.

Published: 17th August 2019 04:00 AM  |   Last Updated: 17th August 2019 02:25 AM   |  A+A-

If there is one thing that can revive demand in a sluggish market, it’s generational leap in technology. India is currently witnessing a major slump in domestic automobile sales, with the numbers hitting a near 20-year low.

This would be the right time for the government to reconsider its stand on technologically advanced automobiles. Original Equipment Manufacturers (OEMs), across the world, are betting big on two technologies—electric and autonomous vehicles. The developments are not restricted to cars. Manufacturers such as Tesla have already developed successful working models of electric heavy-duty trucks. The Volvo Group, meanwhile, has demonstrated the working of Level-4 autonomous trucks. The introduction of these new generation passenger and commercial vehicles is expected to revive demand in key markets.

China, for instance, has launched a ‘blue sky’ policy to improve the local air quality. Under this, all China-III vehicles have to be phased out by the end of 2019 as part of emission control action. Analysts believe a big chunk of vehicles replacing the ones phased out would be electric. This is expected to revive demand in the sluggish Chinese auto market. Meanwhile, India is still reluctant to open up the market to autonomous vehicles.

Though policy hurdles have been cleared for electric vehicles, its adoption is still poor. In a hilarious incident, auto major Mahindra & Mahindra’s managing director Pawan K Goenka disclosed that at their recently concluded annual general meeting, shareholders asked when the company was going to produce electric vehicles.

“We have been producing and selling electric vehicles for the last nine years. After selling 5,000 e-cars on Indian roads, if our shareholders do not know we make them, we have failed in our communication,” he said. From an environmental perspective, this slump in auto sales could be construed as the perfect timing to switch gears. A vigorous push for e-vehicles, by the state and OEMs could revive demand in a different segment, while paving way for cleaner transport.

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