As the Automobile Industry goes Through a Paradigm Change, Major Players Position Themselves

The automobile industry is going through a major paradigm change with shared mobility making a huge impact on the industry already. The recent car sales decline has been attributed by the Indian Finance Minister to the rapid growth of Uber and Ola in Indian cities, which has made the Indian consumers reluctant to buy vehicles as they much prefer to “rent” it.

While the truth of this attribution can be debatable, there is no doubt that the growth of shared mobility is having an impact on the sales of cars at least in the Indian urban areas. Major automakers such as Mahindras are now tying up with rental car companies such as Revv to rev up their car sales through innovative business models. With buyers not willing to shell out major moolah for an asset whose technology might become obsolete in a few years, there are now buyback schemes being used by car makers to give comfort to buyers that their assets will not turn out to be duds in a few years.

Hyundai which is the second largest car maker in India is also trying to keep up with the change of electrification of the auto industry. The company has been one of the first ones to introduce an electrically powered SUV Kone in the Indian market. It has also invested hundreds of millions of dollars into Ola to gain a partnership which will allow it to sell its cars in the future. With Ola and Uber becoming major buyers of cars on the behalf of their driver partners, they have become extremely important for car makers. Hyundai is planning to introduce a new mass market electric car which it can sell to Ola in large quantities. The company wants to start selling this $15,000 electric car to Ola by 2022 when it sees the growth of the EV market explode. Hyundai is also planning to set up a battery manufacturing plant in India similar to what Suzuki is doing in order to keep the costs of the EVs it makes competitive. The Indian car market is highly price-sensitive and the costs have to be kept really low and competitive in order for the EVs to sell. Also, read Why India Needs to Drive an All-Electric Scooter Today