Today, perhaps more than ever before, India’s Transportation & Mobility (T&M) sector is under constant pressure to innovate and optimize costs. On one hand, suppliers are looking at widespread electrification, propelled by regulatory changes and a general rise in environmental awareness. This is changing demand patterns for specific vehicle component clusters – some suppliers face shrinking volumes, while others have to cope with a sudden demand surge. On the other hand, there is a new generation of customers who seek differentiated in-vehicle experiences (necessitating state-of-the-art parts) at a competitive price point.

So, what does all of this imply for T&M suppliers? A significant strategic, operational, and financial transformation will be required, as well as the ability to mass-customize products. This will prove key as Indian suppliers look at answering the following pressing issues:

Electric vehicles (EV) are calling for new capabilities – Over the last few years, next-gen vehicle technology has disrupted traditional T&M supplier models, calling for a rethink in terms of design, manufacturing, engineering, and partnerships. Research suggests that the global EV market is witnessing a steady uptick, even as the Indian government encourages the use of green transport alternatives in a bid to improve environmental footprints. In order to keep up with this trend, suppliers must realign infrastructure to meet EV range, weight, and lifetime parameters.

Suppliers must address Quality, Regulations & Cost mandates – Cost and quality constraints have always been a concern, and in today’s regulatory climate, the fallout for non-compliance is extremely severe. A virtualized environment is needed where component designs are first tested against quality and safety standards, before commencing production. Suppliers must also look at new ways of development and delivery, built on seamless multi-disciplinary collaboration across design, engineering, and production cycles. This will also help to create a centralized governance structure, harmonizing different sites and keeping costs at an optimum.

Customer experiences have to be reimagined – Vehicle environments are no longer simply utility-based. As the Indian consumer’s demands around infotainment, comfort, safety, and connectivity rise, suppliers and OEMs must diversify their product/service portfolios. Using virtual simulations, for example, suppliers can conceptualize and pre-validate new products without heavy upfront spends. Technology will also help collate consumer data and ensure market fitment for new concepts – this will be essential in mitigating low adoption rates and inadequate returns, especially in a market where 54% of customers are choosing experience over price.

There is a shift from mass production to mass customization – Mass customization is a key trend for manufacturers, where highly tailored products are delivered on scale. This is near-impossible using conventional methods, necessitating a steep transformation curve. Yet 90% of Indian auto suppliers spend just 1% of budgets on R&D, according to a report by AT Kearney – clearly, organizational attitudes towards innovation need to change. Fred THOMAS, Global Manufacturing Director for DELMIA at Dassault Systèmes, explains this further: “The first thing that must change is the idea that enterprise-wide mass customization capabilities, driven by digital continuity, can be achieved through low budget technology purchases at a department or plant level.” In other words, suppliers should consider a strategic pivot and invest in smart technology, in order to be able to mass-customize components for global reach. This is even more important, considering that too few Indian suppliers are currently doing business globally – the report found that for 64% of Indian auto suppliers, exports comprise less than 10% of revenues.

Needless to say, this is a dynamic landscape for T&M suppliers. While these challenges threaten outmoded approaches to manufacturing and distribution, on the other side there are significant gains and long-term success. AT Kearney predicts that auto component sales in India will increase fourfold by 2020. Suppliers who meaningfully leverage the power of technology, establishing digital continuity across various stages in the value chain, will stand to gain a competitive edge.