Context: The coronavirus pandemic and the subsequent lockdown put the brakes on the growth of the Indian automobile industry. India’s automobile industry, the fourth largest in the world by volume, seems headed for another year of significant declines. Sales of passenger vehicles have been particularly hard hit, and recorded zero growth in April this year while a month earlier in March it was down 52 percent. The pandemic has brought to the forefront an opportunity for rapid adoption of digitisation in the passenger vehicle segment, putting the focus on a contactless environment. 
Problems of Indian Automobile Sector 
In pre-COVID times

• Declining consumer demand
• Difficulty in transitioning into BS-VI technology
• Extinguishing inventories of left-over BS-IV vehicles
• Credit crunch in the NBFC sector

In Post-COVID times

• Challenges of dealing with a completely new environment – rising protectionism and decline in international trade
• Decreased purchasing power of consumers
• Disruption in manufacturing capabilities
• Issues with inventory management and labour shortages
• Need for emergency response mechanisms in the backdrop of disrupted global supply chain.

India and E-Vehicles

• Strong growth: The EV industry in India managed to post a decent 20% increase in sales in FY20 compared to FY19
• Policy Push by government for e-vehicles: The GST council reduced the rates from 12% to 5% for vehicles, and from 18% to 5% for vehicle chargers. 
• Push by State governments to adopt e-vehicles For ex: Kerala government has instructed all its departments to purchase only e-vehicles from the next financial year.
• Dedicated schemes like FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) have incentivised local manufacturing and the growth of domestic technology.

Electric Vehicles – Prospects in Post-COVID times

• Personal mobility is going to pick up again post-Covid, as people would avoid mass transport thus giving boost to e-vehicles
• Driver of growth: In Post-COVID times, fastest growth for automotive sector would come from the e-rickshaws segment that plugs last-mile connectivity.
• India’s Demographic advantage: Surveys point that younger consumers, particularly females, are more willing to invest in EVs than older generation. 
• Environmental friendly: Increased environmental awareness among public, especially after COVID crisis, could lead to increased adoption for e-vehicles

Digital Transformation in the Automotive Industry

• Technological advancements and digital transformation are increasingly changing the automotive industry. 
• When it comes to gaining an advanced and better experience, consumers are becoming more demanding, which is why automotive companies are striving to revamp their technological and digital offerings.
• Digitization is increasing investments in the automotive industry. Companies in the industry understand that they must transform to meet consumer demands, just like any other industry going digital. 
• The current digital transformation trends in the automotive industry are very impressive, which is good given the increasing appetite for a digitally enhanced experience among consumers.
• According to research findings, up to 76% of organizations are investing in emerging digital technology in order to stay competitive. 
• In addition, AI will handle 15% of all customer service transactions, according to Gartner, by the year 2021, which is an increase of about 400% from 2017.

The top 6 digital transformation trends in the automotive industry are

Connectivity is the Name of the Game

• Connectivity is the word that perfectly matches the current vibe. It is more than a nice addition. It is a necessity demanded by consumers.
• Just a few years ago, people were dreaming about owning cars with Wi-Fi connectivity. 
• Today, such vehicles are widely available because of the constant need for digital connectivity among younger vehicle buyers. 
• Manufacturers are quickly realizing that it is now difficult to market or sell cars without such connectivity features.

Personalized Consumer Experience

• About 74% of business executives believe that by 2030, the level of production in Western Europe will fall below 5%, a 60% drop from 2017.
• The improvements to performance, flexibility, and production will overcome the obstacles in building smart factories.

Predictive Maintenance Based on IoT Connectivity Tools

• This solution provides amazing results, such as prediction of failure in advance and improvements of more than 30% in maintenance uptime.

Advanced Data Security and Protection

• The automotive industry is the world’s second most data-driven industry, which is why manufacturers work with software development firms.
• Modern smart cars collect data on traffic patterns, drivers, their frequent destinations, and much more. 
• This data is useful when it comes to engaging and communicating with drivers. Connected systems, however, needs to be secure to protect driver information. 
• This is why manufacturers are constantly looking for new advancements in protection and security.

Service Oriented Mobility

• Uber has been enjoying massive success in its niche after shifting focus to service-oriented forms of mobility from privately owned cars.
• Vehicles are becoming a key component of connected living. In addition to providing some financial relief, startups such as Uber eliminate huge expenses such as the cost of buying a car, licensing, and maintenance.

Digitized Vehicle Manufacturing Industry

• 2020 will be another exciting year of challenges and transformations that will take the world several steps closer to a digitally advanced future.
• Much sooner than most people think, advancements being tested and/or used in the industry will be quite common. 
• Digital transformation is also beneficial for the environment as well as drivers. Manufacturers still need to overcome many challenges; however, the automotive industry is changing for the better and for good.

Road Ahead

• The Auto sector has had a big blow as far as last quarter are concerned but the month of september has seen a positive uptrend and a greenshoots have most certainly emerged, we need to keep an eye-out for the festive season, these are the entery level segment from where the bounce back is coming out and rural demand has gone up, it is "Bharat that is leading India".
• 2020 should be a surprising and exciting year for consumers since IoT, artificial intelligence, Blockchain, and other digital technologies are already making waves in other industries. Such technologies are set to make an impact in the automotive industry as well.