Automobile Industry — India > Market Size, Challenges and How Salesforce can help the industry to overcome.

Automobile Industry

The automobile industry in India is one of the largest and fastest-growing industries in the country. It is a significant contributor to the Indian economy and provides employment to millions of people directly and indirectly. The industry comprises of different segments, including passenger vehicles, commercial vehicles, two-wheelers, three-wheelers, and tractors.

The Indian automobile industry is dominated by some major players such as Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, and Honda. These companies account for a significant portion of the market share, but there are also many smaller players in the industry.

The passenger vehicle segment is the largest segment of the Indian automobile industry, followed by two-wheelers. The demand for passenger vehicles has been increasing in recent years due to rising incomes and changing lifestyles. India is also becoming an important market for electric vehicles, with several companies investing in the development of EVs.

The Indian government has also been taking steps to support the growth of the automobile industry. The ‘Make in India’ initiative has encouraged foreign companies to invest in the country and set up manufacturing facilities. Additionally, the government has implemented various policies to promote the use of electric vehicles and reduce carbon emissions.

Despite the growth and potential of the Indian automobile industry, there are also some challenges. These include issues related to infrastructure, high taxes and tariffs, and the need for skilled labor. However, overall, the Indian automobile industry is expected to continue to grow and contribute to the country’s economic development.

The Indian automobile industry has come a long way since its inception in the early 1900s. Here’s a brief overview of its history, present state, and future prospects:

History: The Indian automobile industry began with the establishment of Hindustan Motors in 1942. The company produced the Ambassador car, which remained popular in the Indian market for several decades. In the 1980s and 1990s, foreign automakers such as Suzuki, Hyundai, and Honda entered the Indian market and began manufacturing cars locally. This led to a period of rapid growth in the industry.

Present: Today, the Indian automobile industry is one of the largest and fastest-growing in the world. It comprises various segments, including passenger vehicles, commercial vehicles, two-wheelers, three-wheelers, and tractors. The industry is dominated by some major players such as Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, and Honda. These companies account for a significant portion of the market share, but there are also many smaller players in the industry.

The passenger vehicle segment is the largest segment of the Indian automobile industry, followed by two-wheelers. The demand for passenger vehicles has been increasing in recent years due to rising incomes and changing lifestyles. India is also becoming an important market for electric vehicles, with several companies investing in the development of EVs.

Future: The Indian automobile industry is expected to continue to grow and evolve in the coming years. One of the key trends that are likely to shape the industry’s future is the shift toward electric vehicles. The Indian government has set a target of achieving 30% electric vehicle penetration by 2030, which is expected to drive demand for EVs in the country.

Another trend that is likely to shape the industry’s future is the increasing focus on connected and autonomous vehicles. Indian automakers are investing in developing advanced technologies that enable vehicles to communicate with each other and the surrounding infrastructure.

The industry is also likely to face challenges such as changing consumer preferences, increasing competition, and regulatory changes. However, overall, the Indian automobile industry is expected to continue to play a significant role in the country’s economic development.

Here are some updated financial data of the major players in the Indian automobile industry for the fiscal year 2021–22 (April 2021 to March 2022) along with a breakup:

Maruti Suzuki India Limited:

• Revenue: INR 802.7 billion (~USD 10.8 billion)
• Profit After Tax: INR 57.4 billion (~USD 771.8 million)
• Breakup: Passenger Vehicles: 97.9% & Spare Parts and Accessories: 2.1%

Tata Motors Limited:

• Revenue: INR 3.16 trillion (~USD 42.6 billion)
• Profit After Tax: INR 61.5 billion (~USD 828.6 million)
• Breakup: Passenger Vehicles: 34%, Commercial Vehicles: 57% & Others: 9%

Mahindra & Mahindra Limited:

• Revenue: INR 1.33 trillion (~USD 17.9 billion)
• Profit After Tax: INR 24.7 billion (~USD 332.5 million)
• Breakup: Automotive: 78% & Farm Equipment: 22%

Hero MotoCorp Limited:

• Revenue: INR 301.3 billion (~USD 4.1 billion)
• Profit After Tax: INR 21.7 billion (~USD 292.4 million)
• Breakup: Two-wheelers: 100%

Bajaj Auto Limited:

• Revenue: INR 402.9 billion (~USD 5.4 billion)
• Profit After Tax: INR 56.7 billion (~USD 763.1 million)
• Breakup: Motorcycles: 85%, Commercial Vehicles: 13% & Others: 2%

General Challenges — There are major challenges faced by the Indian automobile industry:

1. Supply chain disruptions: The Covid-19 pandemic has led to significant disruptions in the supply chain of the automobile industry. Many auto manufacturers have struggled with sourcing critical components, and this has led to production delays and increased costs.
2. Changing consumer preferences: There has been a shift in consumer preferences towards electric and hybrid vehicles, which is a challenge for the Indian automobile industry that has historically been focused on producing gasoline and diesel vehicles.
3. Increasing competition: The Indian automobile industry is highly competitive, with both domestic and international players vying for market share. This puts pressure on companies to innovate and improve their products and services, which can be a challenge.
4. Rising input costs: The prices of raw materials, such as steel and aluminum, have been increasing globally, which has led to higher input costs for the automobile industry. This has put pressure on companies to increase prices or absorb the costs, which can impact their profitability.
5. Regulatory challenges: The Indian automobile industry is subject to a range of regulations related to safety, emissions, and fuel efficiency. Compliance with these regulations can be challenging for manufacturers, particularly smaller companies that may lack the resources to invest in research and development.
6. Infrastructure challenges: The development of electric vehicle infrastructure, such as charging stations, is still in its early stages in India. This can be a challenge for companies that are looking to introduce electric vehicles to the market, as consumers may be hesitant to purchase these vehicles if charging infrastructure is not readily available.
7. Economic slowdown: The Indian economy has been facing a slowdown in recent years, which has impacted consumer spending on automobiles. This can be a challenge for the automobile industry, as companies may struggle to maintain their sales volumes and profitability.

Overall, the Indian automobile industry faces a range of challenges that require innovation and adaptation to overcome. Companies that can navigate these challenges and continue to provide high-quality products and services are likely to succeed in the long run.

IT Challenges

The Indian automobile industry has been increasingly reliant on information technology (IT) to drive innovation, improve efficiency, and enhance customer experience. However, there are several challenges that the industry faces in leveraging IT effectively. Some of the key IT challenges faced by the Indian automobile industry are:

1. Data management and analytics: With the proliferation of connected vehicles and the internet of things (IoT), the automobile industry generates vast amounts of data. The challenge is to manage and analyze this data effectively to extract meaningful insights and improve business performance.
2. Cybersecurity: The increasing connectivity of vehicles and IT systems makes the automobile industry vulnerable to cyber attacks. Cybersecurity is a critical challenge that requires continuous monitoring and upgrading of IT infrastructure to protect against potential threats.
3. Integration of legacy systems: Many automobile manufacturers have legacy IT systems that may not be compatible with newer technologies. Integrating these systems can be a challenge, and failure to do so can impact productivity, efficiency, and customer experience.
4. Talent acquisition and retention: The Indian automobile industry faces a shortage of skilled IT professionals, particularly in areas such as data analytics, cybersecurity, and artificial intelligence. Attracting and retaining talent is a significant challenge for the industry.
5. IT infrastructure and investment: The Indian automobile industry needs to invest in modern IT infrastructure to support digital transformation initiatives. However, given the significant costs involved, many companies may struggle to allocate sufficient resources for IT investments.
6. Regulatory compliance: The automobile industry is subject to a range of regulations related to data privacy and security. Companies need to ensure that their IT systems comply with these regulations, which can be a challenge given the complexity of IT infrastructure and data management practices.

Overall, the Indian automobile industry needs to address these IT challenges effectively to leverage the full potential of technology and drive innovation and growth in the sector.

How CRM can help Indian Automobile Industry?

1. Improving lead management: CRM can help automobile companies manage their leads more effectively. By automating lead capture, lead scoring, and lead nurturing processes, companies can ensure that their sales teams are focusing on the most promising prospects. CRM can also provide sales teams with real-time insights into customer interactions, which can help them personalize their sales pitches and close more deals.
2. Enhancing customer segmentation: With the help of CRM, automobile companies can segment their customers based on their preferences, behavior, and demographics. This can help them create targeted marketing campaigns and offer personalized products and services. For example, a company can segment customers who are interested in electric vehicles and offer them special discounts or promotions.
3. Improving customer retention: CRM can help automobile companies improve customer retention by providing them with a 360-degree view of their customers. By tracking customer interactions across multiple touchpoints, companies can identify potential issues before they become major problems. This can help them take proactive steps to address customer needs and prevent churn.
4. Streamlining after-sales service: CRM can help automobile companies manage their after-sales service more efficiently. By tracking service requests, complaints, and feedback, companies can identify areas for improvement and take corrective action. CRM can also help companies provide customers with real-time updates on their service requests, which can improve customer satisfaction.
5. Optimizing dealer management: CRM can help automobile companies manage their dealer network more effectively. By providing dealers with real-time access to customer data, companies can help them personalize their interactions and improve customer satisfaction. CRM can also help companies track dealer performance and identify areas for improvement.
6. Enhancing data analytics: CRM can help automobile companies generate valuable insights from customer data. By analyzing customer behavior and preferences, companies can identify trends and patterns that can help them make better business decisions. CRM can also help companies track key performance indicators (KPIs) related to customer satisfaction, sales, and service, which can help them measure the effectiveness of their strategies.
7. Improving supply chain management: CRM can help automobile companies manage their supply chain more efficiently. By providing real-time visibility into inventory levels, order status, and delivery schedules, companies can optimize their procurement and distribution processes. This can help them reduce costs and improve delivery times, which can lead to increased customer satisfaction.
8. Enhancing social media engagement: CRM can help automobile companies engage with customers on social media more effectively. By monitoring social media conversations and sentiment, companies can identify opportunities to engage with customers and address their concerns. This can help companies improve their brand reputation and build stronger relationships with customers.
9. Personalizing marketing campaigns: CRM can help automobile companies personalize their marketing campaigns based on customer preferences and behavior. By using data analytics and machine learning algorithms, companies can create targeted campaigns that resonate with customers. This can help them improve conversion rates and drive revenue growth.
10. Implementing predictive maintenance: CRM can help automobile companies implement predictive maintenance programs that can help them identify potential issues with vehicles before they occur. By analyzing data from sensors and other sources, companies can predict when a vehicle is likely to require maintenance or repair. This can help them improve customer satisfaction and reduce costs associated with warranty claims.
11. Enhancing mobile capabilities: CRM can help automobile companies enhance their mobile capabilities to provide customers with a more convenient and personalized experience. By developing mobile apps that allow customers to schedule service appointments, track their vehicle status, and receive notifications, companies can improve customer satisfaction and loyalty.
12. Managing product recalls: CRM can help automobile companies manage product recalls more efficiently. By tracking vehicle identification numbers (VINs) and other relevant information, companies can identify affected customers and notify them of the recall. This can help companies improve customer safety and reduce the risk of reputational damage.
13. Providing real-time analytics: CRM can provide automobile companies with real-time analytics that can help them make data-driven decisions. By tracking customer interactions, sales performance, and service requests in real-time, companies can identify emerging trends and take proactive steps to address them. This can help companies improve customer satisfaction and achieve better business outcomes.
14. Enhancing collaboration: CRM can help automobile companies enhance collaboration between different departments, such as sales, marketing, and customer service. By providing a single source of truth for customer data, companies can ensure that everyone is on the same page and working towards common goals. This can help companies improve efficiency and effectiveness, and ultimately drive business growth.
15. Integrating with third-party systems: CRM can help automobile companies integrate with third-party systems, such as marketing automation platforms and customer feedback tools. By consolidating data from multiple sources, companies can gain a more comprehensive view of their customers and their needs. This can help companies improve customer engagement and build stronger relationships with customers.
16. Enabling self-service: CRM can help automobile companies enable self-service capabilities for customers, such as online booking and payment portals. By providing customers with more convenient ways to interact with the company, companies can improve customer satisfaction and reduce the workload of their customer service teams.

Salesforce offers a range of products that can help the Indian automobile industry address the challenges and opportunities I mentioned earlier. Here are some of the Salesforce products that can be useful:

1. Sales Cloud: Will help automobile companies manage their sales process more effectively. Sales Cloud offers features such as lead and opportunity management, sales forecasting, and collaboration tools that can help companies improve sales productivity and customer engagement.
2. Service Cloud: Helps automobile companies manage their customer service process more efficiently. Service Cloud offers features such as case management, knowledge management, and omnichannel support that can help companies improve customer satisfaction and loyalty.
3. Marketing Cloud: This product can help automobile companies create and execute personalized marketing campaigns. Marketing Cloud offers features such as email marketing, social media advertising, and journey builder that can help companies reach the right customers with the right message at the right time.
4. Commerce Cloud: This product can help automobile companies create a seamless and personalized online shopping experience. Commerce Cloud offers features such as product catalog management, shopping cart, and payment processing that can help companies increase online sales and customer satisfaction.
5. Einstein Analytics: This product can help automobile companies gain insights into their sales, marketing, and service data. Einstein Analytics offers features such as data visualization, predictive analytics, and AI-powered insights that can help companies make data-driven decisions and improve business outcomes.
6. AppExchange: This product is an online marketplace that offers a range of third-party applications that can be integrated with Salesforce. AppExchange offers applications for areas such as customer feedback management, supply chain management, and predictive maintenance that can help automobile companies address specific business needs.

Overall, Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Einstein Analytics, and AppExchange are some of the Salesforce products that can help the Indian automobile industry address the challenges and opportunities I mentioned earlier.

Experience Cloud is another Salesforce product that can be useful for the Indian automobile industry, particularly for auto insurance companies.

Experience Cloud allows companies to create customized portals, communities, and websites to engage with customers, partners, and employees. Here are some ways in which Experience Cloud can help auto insurance provider companies:

1. Self-service portals: Experience Cloud allows auto insurance companies to create self-service portals where customers can manage their policies, submit claims, and access other services. This can help reduce the workload of customer service teams and improve customer satisfaction.
2. Collaboration communities: Experience Cloud allows auto insurance companies to create collaboration communities where agents, brokers, and other partners can share information and work together more effectively. This can help improve collaboration and communication across the entire ecosystem.
3. Personalization: Experience Cloud allows auto insurance companies to create personalized experiences for each customer based on their preferences, history, and behavior. This can help improve customer engagement and loyalty.
4. Mobile-first design: Experience Cloud is designed to provide a seamless experience across different devices, including desktops, tablets, and smartphones. This can help auto insurance companies reach customers wherever they are and provide a consistent experience across different touchpoints.
5. Integration: Experience Cloud can be integrated with other Salesforce products, such as Sales Cloud, Service Cloud, and Marketing Cloud, as well as with third-party systems. This can help auto insurance companies consolidate data from different sources and gain a 360-degree view of their customers.

In summary, Experience Cloud is another Salesforce product that can be useful for the Indian automobile industry, particularly for auto insurance companies. Experience Cloud can help auto insurance companies create self-service portals, collaboration communities, personalized experiences, mobile-first design, and integration with other systems.

Conclusion

To conclude, the Indian automobile industry is a vital sector of the Indian economy and has seen significant growth in recent years. However, the industry is facing several challenges, such as changing customer expectations, increasing competition, and the need to adopt new technologies.

To overcome these challenges and stay ahead in the market, automobile companies in India need to adopt innovative solutions, especially in information technology. Salesforce, with its range of products such as Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Einstein Analytics, and Experience Cloud, can provide the necessary technical support to address the challenges faced by the industry.

By leveraging these products, the Indian automobile industry can improve its sales, marketing, service, and customer engagement processes, as well as gain insights into their data and collaborate more effectively with its partners and customers.

In summary, the Indian automobile industry needs to adopt new technologies to meet changing customer expectations and overcome competition. Salesforce can provide the necessary support to the industry by offering a range of products that can help companies to address these challenges and drive growth in the future.