Offering new-age technologies at affordable prices is one of the auto industry's big challenge, says Hisashi Takeuchi, MD & CEO of Maruti Suzuki, adding, “Innovation is the key to finding ways to integrate advanced features without compromising on cost-effectiveness.”
The MD of the largest car maker asserted that the industry country must develop a robust local ecosystem for the electronics industry to become truly self-reliant.
Addressing the 64th Automotive Component Manufacturers Association’s annual session, Takeuchi said the automotive industry is undergoing a transformative shift driven by an increasing demand for comfort, convenience, safety, and adherence to evolving regulations. Customers are seeking feature-loaded, technology-driven experiences.
“This shift is leading to a significant increase in the penetration of electronics within our vehicles. Our challenge is to develop and offer these new-age technologies at affordable prices for the Indian market,” he added.
The comments from Maruti Suzuki come as the country's entry-car segment has witnessed a prolonged challenge post-COVID-19.
The humble hatchback, which accounted for over half of the market, has seen its share come down to 25-30% of the overall market, while the high-priced SUVs have shot up to 50%.
Vehicle prices have increased due to changes in regulation and inflationary pressures, shooting up the final acquisition price by over 25-30% and widening the gap for a two-wheeler buyer to upgrade to an entry-level car.
The average vehicle price has increased from Rs 8 lakh to Rs 12 lakh in the last five years, making vehicle acquisition out of the reach of many entry-level car buyers. The pent-up demand immediately after COVID has taken the Indian car market to a new high of 4.2 million units in FY-24. The growth rate this financial year has slipped to almost 1%.
Given the affordability challenge, Takeuchi urged the auto component makers to invest in R&D, leverage the understanding of local market dynamics, and collaborate across the value chain.
“This means more than just manufacturing; it involves a holistic approach that includes local testing facilities. India must position itself as a hub for affordable mobility components,” he added.