MUNICH, Germany The automotive crisis is calling for a paradigm shift in the automotive industry, says Ravi Pandit, CEO of India-based software and semiconductor technology company KPIT Cummins.
When the automotive crisis will be over, the face of the industry will have changed radically, predicted Pandit in an interview with EE Times Europe. Pandit expects a multi-dimensional shift, with changes and displacements in many ways.
First, there will be a greater focus on small cars, Pandit said. These cars will fit better into the post-crisis landscape not only because customers in Western countries will turn to smaller, more fuel efficient cars but also because in emerging markets such as India or China, these cars will be the vehicle of choice for the masses of first-time car buyers. And these markets will set the agenda with their own production, Pandit believes.
Second, there will be a different use of fuel. This trend, fed by low buying power in emerging markets, accompanied by rising fuel prices and fuel shortages in a global scale, will call for different power train approaches. Hybrid drive vehicles and electric cars will conquer significant market shares. Also in conventional cars, the powertrain will be modified.
In this context Pandit pointed out that India already has HEVs and electric cars in industrial production a fact overseen by most Western market watchers.
Third, the location for manufacturing will change. Much like in the semiconductor industry, automotive mass production will more and more take place in low-price countries while design and perhaps some prototype production will remain in the industrial countries. Pandit pointed out that India already disposes of significant automotive manufacturing activities. For instance, Skoda, a company of the Volkswagen group, produces its Fabia model in India for the local market. Hyundai and Suzuki are in mass-production in India and serve export markets from there. And in the near future according to Pandit in two months Indian OEM Tata will start to export its Nano for export markets.
While many automotive OEMs active in the European markets already have production sites in low-salary Eastern European countries, in the future the production will move increasingly to the BRIC countries where production costs are even lower, the manager affirmed.
In won't be much of a problem to meet the high quality standards in today's existing automotive industry, Pandit believes. The durability and reliability of a car is increasingly determined by its electronics and within the electronics by software. "In terms of quality, software and software design methodologies will determine a car's quality," Pandit said. "In this context, standards such as Autosar and SIL-5 have done a great job."
Fourth, the use of electronics in cars will increase. For safety, better fuel efficiency and infotainment, an increased electronics content of the cars will be inevitable even in low-price markets. While the first part of this statement is consistent with what experts in Europe say, it is surprising that even in cars such as the Tata Nano, an example for an extremely frugal kind of vehicle aiming at first-time car buyers, electronics content will increase.
With electronics, electronic design services, software and production activities shifting to low-cost countries, India will emerge as a major player in the automotive industry, Pandit predicted. "India has the conditions and the experience to offer automotive-grade quality," he said. "After all, we develop software and design chips for cars already for many years."
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