The Bumpy Road for Connected Vehicles in India
Written by Loganathan Gobi Subramnian and Saikumaar Nagarajan
For a rapidly growing economy like India, especially having that growth fueled over the last two decades by tech companies, one would assume that any technology adoption would be a walk in the park. The ease with which the country leapfrogged fixed line telephony to embrace wireless connectivity is a case in point. India now has the fastest growing cellular market in the world. All other related connected tech isn’t too far behind: the Indian cellular revolution has spawned a booming market for broadband, smartphones, smart devices and finally content + data consumption through these smart devices. The entry of Reliance’s Jio has only further shaken up the whole market for the better.
Given these trends, plus topping it off with one of the fastest growing automotive markets in the world, it’s only natural to extend the argument that the next wave of tech adoption in India would be Connected Vehicle Services. But that has surprisingly proven to be false off late.
While multiple OEMs, system integrators and other stakeholders have been having a go at telematics since the late 2000s, most have failed to gain significant traction in the market. In the commercial segment for example, Ashok Leyland setup and spun off a dedicated division for bringing in fleet telematics — but this failed to gain any serious market traction. Honda launched Honda Connect last year with much fanfare, but that too hasn’t enthused the consumers to expected levels.
We would argue that fundamentally, India is a different eco-system for connected tech — posing it’s own set of unique problem statements. Approaches which simply pick up telematics from European markets and drop it here and expect the natives to flock to it will naturally fail. For example, there are many efforts underway to bring in the same eCall features prevailing in the EU to India — this is a fundamental gap in understanding of what the Indian market needs or will have the appetite to consume.
We’ll look at some of the key unique challenges that have to be considered and surmounted, if any OEM or System Integrator or a Tier 1 manufacturer is to succeed in bringing in Connected Vehicles Services to India. We’ll examine these challenges through two different approaches, and deep-dive into specific issues.
- The Inside Out View: Problems with Enablers
What we’ve depicted above is a systems view of a typical Connected Vehicles setup. At the core is the ‘Processing Node’: this simply pulls in data from the Vehicle Gateway node, overlays with Location Sensing node data and uses the Transmission Node channel to pump processed data out.
From a maturity standpoint, the state of ‘Processing Node’ in India is best-in-class. Availability of technology and design prowess is pretty much a global market, and India has made good progress in this segment. Vehicle connectivity is rather being let down by what we call the “Enablers”: the Vehicle Gateways, Location Sensing and the Transmission channels.
Most vehicles in India, including those in the passenger segment, still do not have a CAN based in-vehicle network. The Processing Node will have to rely on age old tech like basic sensor I/Os. When the input sensing isn’t state of art, the Processing Node will only faithfully use what’s available: essentially it is Garbage In — Garbage Out. Apart from the passenger + transportation segment, a key automobile segment in India is the tractor business. Unfortunately here too, digitization of in-vehicle networks hasn’t taken off in earnest. John Deere’s offerings in India though do feature a CAN network — paradoxically, bringing in electronics hasn’t brought down the price of their tractors, and hence their market share (and that of JD Link) remains limited.
In connected mobility, location sensing is a critical element, as Track and Trace is the first basic customer feature desired. In India, we are still reliant on GPS for location availability. Designing a system to sense location always boils down to a trade-off between sensitivity of location and cost. Availability of the GPS satellite constellations for the sensing modules to latch on to is a key obstacle. Delays in the much touted IRNSS & GAGAN, the desi answer to GPS, isn’t also helping. To make matters worse, GoI is getting the industry to rush headlong into adopting AIS 140 standards, where the indigenous location sensing infrastructure is not even in place!
The third and most critical failure node among the Enablers is the Transmission Node. Availability, reliability and latency of the telephony network is critical in determining the eventual end user experience. Despite the big talk from the government on 5G rollout, the lesser said about the current problems with our cellular network the better.
2. The Outside In View: Is the ecosystem ready?
Apart from a systems view, one other lens for viewing Connected Vehicles Services in India is what we term as the Outside In view; here too we see three major influencing forces.
The “Active Consumers” of Connected Services in India, which include end users and business customers are critical cogs in driving the wheel. While the need for rich end user experiences within the passenger segment and the necessity of bringing down logistics costs exist obviously, the Indian end user market is still waiting for the ‘killer app’ for connected vehicles. There are obvious challenges — expectations of a typical “value conscious” Indian user is a tough nut to crack; India in any sense is a massive yet heterogeneous market with a proliferation of language and cultural contexts. For a generation which has only recently started adopting the internet and smartphones, there is often an argument made about an apparent lack of readiness within the Indian consumer market for using connected applications. To top it, this is market which is known to consider total cost of ownership before even buying a car — getting it to spend on subscription post purchase will be a stretch.
Other participants like the government, dealer, financing and insurance networks etc. are the second set of influencers: the ‘Passive Stakeholders’. A true Connected Services ecosystem can deliver value through network effects, which is contingent on allied services like dealerships, accessories vendors, insurance companies and other value chain participants getting into the network seamlessly. Integration will be a massive challenge, given the low levels of penetration/maturity of IT systems within the automotive value chain in India. As with any major industry/social change in India, Connected Services too needs a bit of push from the Government. Basic constraints like data costs, lack of specific M2M communication statutory standards and an overall muddiness in regulations for intelligent transportation systems are major hindrances.
To make things worse, the third influencer — ‘Operating Environment’ is a key challenge thrown the way of OEMs and Tier 1 players. It is hard to find a more diverse operating market that India: in terms of weather conditions, road conditions, diversity of users, the sheer breadth of vehicle types. To make matters worse, the end users often modify the vehicles — stretching them beyond designed operating parameters. To account for such operating conditions, excessive design considerations have to be made, which will only drive up component costs for enabling Connected Vehicles services in India.
Putting it all together
Despite all the above challenges, no one would like to miss a $ 2.4 billion market. There are myriad players — including OEMs, chip makers, telecom operators, software companies and system integrators — having a go at the vehicle connectivity market in India. The challenge is to crack the unique combination of multiple complex sub-systems (hardware + RF/Networks + Software + Vehicle systems) which has to span a very vast functional footprint (Tier 1 suppliers, product development, manufacturing, sales, marketing, dealerships, after market) and deliver a consistent end user experience + value in a market like India.
These challenges while difficult, are not insurmountable. Over the coming weeks, we will share a series of strategic interventions (both at a systems engineering context, as well as at a business & ecosystem context) which will be necessary to crack the Connected Vehicles Services market in India.
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