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  • Nov 23, 2021

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Top Trends in 2022: Automotive Sector Edition

The automotive sector in the post-pandemic era is all decked up to get back into a growth trajectory in 2022. The slowdown that has been hovering over the industry for the past few years have allowed automakers the scope to rediscover themselves while adopting digital transformation in order to cater to the changing consumer preferences. As a matter of fact, with COVID-19 becoming a public health concern that will probably stay with us for an indefinite time, it has now become quite natural for consumers to shift focus from public or shared mobility towards safer, convenient and environment-friendly mobility options. This, and many other similar speculations have prepared the automotive industry for a resurrection in 2022, and the years beyond.

Future is connected

With the news of 5G connectivity dropping in soon, as well as the continuous growth of Internet of Things (IOT), an increase in demand for more connected devices and features have been witnessed among automakers and customers alike. In the connected mobility eco-system, the vehicles are allowed to have a two-way communication with other systems outside the range of their local area network, for the purpose of sending digital data to enable remote diagnostics, accessing Wi-Fi hotspots, prevent breakdowns, avert accidents etc.

Although India has recently entered the connected car market, it is still expected to have at least 20% growth in the upcoming years. In fact, in order to popularize connected features, a lot of OEMs are offering 3 years free subscriptions to the customers.

Electric Vehicle is the New Cool Kid

In 2021, between April to September, a total of 6, 261 passenger vehicles (PV) were sold, which indicates a 234% of year-on year (y-o-y) growth. Introducing EVs with heightened battery efficiency, as well as readily accessible charging infrastructure can go a long way in accelerating its adoption around the world. Over the last decade, we have witnessed about an 89% of drop in prices of Lithium-ion battery, reaching a price of $137/kWh in 2020. Additionally, the increasing range of the latest EVs in the market is causing a lot of lingering concerns to subside. This segment, with the government’s policies in its favor, as well as the growing interest among buyers, has a lot of room for growth in 2022.

ADAS (Advanced Driver Assist Systems):

The Indian ADAS market in the current times can be considered to be in its infancy stage, with not a negligible percentage of premium vehicles being equipped with ADAS features including adaptive cruise control, lane-keeping assistance, as well as emergency braking, which barely falls within the lower levels (1-2) of driving autonomy classifications.

However, of late, with the growing requirement for reducing accident fatalities, many premium car manufacturers are embarking on developing budget-friendly sensors, radar, cameras for ADAS application. Furthermore, under the supervision of the Ministry of Road Transport and Highways, a set of safety-related ADAS features have been made mandatory, and hence there is requirement for setting up of regulations regarding ADAS, as well. In the coming years, roughly within 2022-2027, we can expect ADAS to make major in-roads in Indian vehicles.

Digital Foot Forward

With technology companies increasingly becoming an integral part of the automotive landscape, giving access to connected features, electrification and autonomous driving, there is no alternative left for the traditional automakers than to hop on to the digital transformation bandwagon, and get adept to the change at the earliest. With the recently manufactured high-end cars being some of the most digitally complex ones, there will be a huge scope for in-house software-development, going forward; which will lead to an increasing number of tie-ups with technology companies. Many, even, may come to start their own operating systems. In short, digital thinking will be given much preference than ever before.

No Semiconductor Shortage will be entertained

The automotive semi-conductor market is expected to experience a significant growth in 2022. The demand is, basically propelled by the increased semiconductor content in automobiles to cater to the rising demand for Electric Vehicles (EVs) in the market, as well as the increasing need for safety, convenience and comfort systems. Of the fastest growing applications, telematics and infotainment, powertrain, and safety comes in the top three. The strict standards and regulations are generating more demand for semiconductor components in safety and powertrain applications. In 2020 and 2021, the supply-chain got unexpectedly disrupted, leading to further exacerbation of the demand.

Going forward, implementing some of these trends will also effectively impact several Indian OEMs and Tier 1, further impacting the growth trajectory.

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