The automobile sector is facing intense pressure to ‘innovate’ as law of diminishing return has come to haunt it. The automobile manufacturers are involving Information Technology companies in order to innovate, and India, being an IT hub, is set to immensely benefit from this. The growing demand for automation among the millennial consumers has forced automobile manufacturers to reach to doors of IT companies.
“Global automotive companies are facing growing demand for automation, for which they require engineers and digital talent. Hence, they are turning to the IT services industry to help address this increasingly urgent need,” said Peter Bendor-Samuel, founder and chief executive officer (CEO) of Everest Group.
In the last quarter, Indian IT companies cracked many deals with automobile majors. Infosys, the second largest IT Services Company bagged the deal for digital transformation of Volvo cars. TCS, the IT giant cracked 600-700 million dollars deal with American automobile major General Motors. As per the deal, the Mumbai based company will also absorb 1,300 GM employees. Cognizant, another IT major with operations in India is building “an integrated customer experience solution for the Hector SUV – developed by MG Motor India.”
“All three deals announced by these IT firms are trendsetters,” said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting. “This shows that Indian IT players are better placed to benefit from the rising spend on technology by automobile makers, globally,” he added.
India is now the second largest Research and Development (R&D) centre in this industry. We can get a basic idea of the exponential growth in this sector in the following example The Indian R&D setup for Mercedes-Benz has metamorphosed from a tiny division with 20 staffers in Bangalore, the IT capital of India, a couple of decades ago into a powerhouse of 5,000 engineers that is contributing significantly to new-age technology. The company is already preparing to double its office space as the scope of work expands significantly.
India plans to lead the way in a sector which could be called confluence of automobile and information technology and this being called as CASE- connected, autonomous, shared mobility and electric. The Indian base is already churning out software codes for Mercedes-Benz’s autonomous and connected cars for the future. The driver-less cars connected with the Internet of Things (IoT) and are the future of the automobile industry. Another transformation which is taking place is the move to electric vehicles from the traditional petroleum supported vehicles.
The talented pool of engineers which India have in an automobile as well as the IT sector has made the country hub for research in autonomous, connected, and electric vehicles sector. All the global automobile manufacturers have their R&D centers in the country. If the country continues to lead in R&D then it is possible that all the global automobile manufacturing companies will have their manufacturing units in the country which will be a big boost for ‘Make in India’ program.
The leadership of the country in Information Technology and its strong presence in automobile sector will make it leader in the production of automobiles in coming decades. The government should provide supporting hands to these R&D centers and the companies which are eager to establish their units in the country.