New Delhi: Reducing import-dependency is a priority for the Indian automotive industry. The government is supporting the domestic auto industry in developing indigenous capabilities, particularly in microprocessors and other critical components. “The automobile industry has to reduce imports,” Vinod Agarwal, President, SIAM & ASDC, and MD & CEO of Volvo Eicher Commercial Vehicle, said at the ETAuto Tech Summit on Wednesday.
Agarwal said, “As we all know, the auto industry acts as an indicator of economic growth in the country. Today, the auto industry accounts for 6.5% of the country’s GDP, and it is growing well. It also contributes 40% to the manufacturing GDP of the country. We employ 30 million people directly and indirectly in the industry. Last year, the industry’s size was USD 151 billion, around 12.4 lakh crores. We exported almost USD 39 billion worth of goods last year, which is a significant contribution to the country’s economy.”
“The auto industry has gone through a difficult period during the pandemic, but we are back on our feet and growing. In terms of sales, last year’s domestic sales reached around 39 lakh units, surpassing the earlier peak of 34 lakhs in 2018-19. Commercial vehicle sales reached around 9.52 lakh units, nearing the earlier peak of 1 million in 2018-19. However, two-wheeler sales are still slightly lower than the previous peak. Last year, it was around 15.8 million units, but it is expected to improve due to the rural economy performing better and favourable monsoon conditions.
Overall, the passenger vehicle and commercial vehicle segments are performing well, while two-wheelers are gradually recovering.
Talking about the reinvention of the automotive industry, he said, “it’s a pertinent question considering the ongoing transformation in the country. The major areas of transformation are sustainability and decarbonization. The Indian government, led by Prime Minister Modi, has set ambitious goals for decarbonization and renewable energy. As part of this vision, the auto industry has a significant role to play. Electrification is one major area where the industry is already making progress. The government is promoting electric vehicles through various initiatives and incentives, and the industry is investing heavily in new technologies and infrastructure. By 2030, a sizable portion of the industry is expected to transition to electric vehicles.”He said that biofuels are another area where the industry is focusing. The aim is to reduce dependency on fossil fuels and promote cleaner alternatives. Ethanol-blended fuels and flex fuels are gaining traction, and oil companies are also adapting to offer more flexibility. Additionally, gas-based fuels like CNG and LNG, along with biogas, are being explored as alternatives.
Ensuring safety on the roads is a crucial aspect. He said that the auto industry is working towards incorporating advanced safety features and promoting awareness and education among the public. Strict safety norms are being adopted, and enforcement agencies are taking action against defaulters. Prompt emergency response systems are also being developed to save lives in case of accidents.
He emphasized that modernization is key, especially in the trucking industry. Measures like mandatory air conditioning in truck cabins will enhance safety and productivity. As the road infrastructure improves, modernization becomes crucial for increased efficiency.
“Digitalization is playing a significant role in improving productivity and reducing costs. Through connectivity and monitoring, the industry is harnessing digital tools to enhance fuel efficiency and optimize operations. Electronics and connectivity in vehicles are driving this digital transformation,”Agarwal said.
