India's automobile sector should take cognizance of today's customers and their growing awareness of the impact they make when purchasing a vehicle. A few decades ago, different parameters defined a family vehicle. Model, brand, utility, after-sale servicing, and resale value mattered when buying an automobile for a family.
Now, that is fast changing since the decision-makers in the family are increasingly generation Y and Z. Family size and structures are getting redefined, with people moving from Tier 3-4 towns and cities to Tier 1-2 for work, study, and business. The size of a household is shrinking in urban India and their mobility requirements define the specifications of a passenger car when buying one. These are the growth of vehicular traffic, traffic congestion, road safety, technology, fuel availability and vehicle emissions. At the same time, space required inside the vehicle, ease of parking and availability of connected features remain important since they would not like to compromise on the always-on-go lifestyle.
While the original classification in buying an automobile in the family, as mentioned earlier, has not changed, a few new demands have been added. The list of such competencies is growing with the changing nature of urban mobility.
The automotive industry in India understands this well and is spending more time on drawing boards, roads, R&D and board rooms to address the new demands, each being rational, with logic and reasoning.
In one of its reports, McKinsey indicates the solution lies in adopting multiple mobility options, which can help urban mobility achieve a better, faster, cleaner, economical, and more convenient transit system. The transit system that India is moving towards is seamless mobility. It is a landscape that will have connected vehicle technologies, using the tech advancements like the integration of the internet of things (IoT) and artificial intelligence (AI).
Urban mobility has become increasingly complex globally and in India. Various factors influence the activity of people and the mode of transportation they use. Deloitte's Global Automotive Consumer Study 2023 reflects a shift in mobility trends, with 59% of vehicle buyers in India concerned about vehicle emissions, pollution levels, and climate change.
According to a study by NITI Aayog and BCG, the economic cost of traffic congestion in Delhi, Mumbai, Kolkata and Bengaluru has been estimated at approximately US$ 22 billion annually. India is expected to have nearly 14 times growth in passenger-kilometers between now and 2030, revealing a study by NITI Aayog, RMI and ORF.
The two reports indicate that the demand for customized personal vehicles will grow while the public transport infrastructure also develops. Automakers are working to develop cars that meet the increased specifications the consumers are looking for in this dynamic urban mobility. The good news is that India is actively investing in and promoting the EV market, which is predicted to hit over 9 million units per annum by 2027, according to an EY study.
Recent studies found that consumers in India are drawn to an EV because they expect lower fuel costs, are concerned about climate change and want to reduce emissions while looking at powertrain technology and innovative design in their new vehicle. It also found that the shift to EVs is based on a strong consumer perception that it will significantly reduce vehicle operating costs.
The auto industry in India is responding positively to such expectations, and the increased use of electric vehicles in urban India has been witnessed in the last few years. It is redefining the way people travel.
Further, if the share of EVs increases to 30% by 2030, India could save up to US$14 billion on its oil import bill, states a report by Council on Energy, Environment and Water (CEEW).
Demonstrating the future of mobility in India with a greater focus on sustainability, automakers are developing new energy vehicles (NEVs) with third-generation hydrogen fuel cell technology. They are also creating an ecosystem for charging infrastructure, a point discussed among Indian consumers buying EVs.
The Union Government has greatly pushed the adoption of EVs in the country. The Union Budget 2023 has a lot of promise for green energy, with a push for green mobility solutions. Earlier policies like production-linked incentive (PLI) and boost to Lithium-ion Battery Production, Solar-Based EV Chargers, and Biofuel will help roll out personalized mobility solutions, like an EV passenger car for discerning customers.
MG Motor is fully determined to make EVs popular in India as a committed partner to address the demands of a 'family' with powertrain options that can fit into a super smart EV with futuristic and innovative design and be a solution for urban mobility. Urban mobility can be as smooth and stress-free as possible provided there is a strong will amongst all stakeholders involved to bring this about. Citizens can do their bit by minimizing unnecessary travel, opting for greener transport options, using designated parking spaces, and being extra careful while driving. The government and town planning departments of respective cities as well as the industry should seek and help foster a constructive dialogue to bring in the needed change. It is an undeniable truth that we are in this together—for better or worse, the choice is ultimately ours.
This article is authored by Mr. Gaurav Gupta, Chief Commercial Officer at MG Motor India.