MISB Bocconi Automotive Conclave 2017
The aim of this Automotive Conclave is to drive a series of elaborations and discussions in the field of automobiles. Beginning with business disruptions, we shall explore the change in business model and strategy throughout the value chain of the automotive industry. From suppliers to OEMs, diving down to dealerships, our intent is to analyze the developments and modifications in this fast growing industry.
Digitization, automation, and new business models have revolutionized many industries and the automotive industry will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector: diverse mobility, autonomous driving, electrification, and connectivity. Many industry players and experts believe that automotive industry is saturated and ripe for disruption and that these four trends will reinforce one another.
This panel discussion aims to discuss the feasibility and effect of these disruptions on the automotive sector and possible changes in the business model.
A short video on challenges faced by the auto industry in last few years and the key disruptive elements. CLICK HERE TO WATCH THE VIDEO
What is the battle fought in the last 3 Years?
The biggest challenge was how to transform from Heavy Breaking to Brake Assist. We must teach the customers not to brake. This is the disruption by itself quoted Chandra Natraja.
Mr. Prashant Sankeshwar, Deputy General Manager at Mercedes-Benz discussed the challenges in auto industry said “Amongst the challenges for the auto industry is digitization. The role of digital channels has become vitally important in the buying decision of the car.Almost 70% of car sales are influenced by digital media. Changing customer journey or buying behavior has been one of the disruptive trends in the auto industry.” Adding here he also mentioned the three keys accordingly for the competitive environment for auto industry in India. The potential is the population and area.
1. No competitors have been able to crack the Indian-specific code
2. With government policies, India has a competitive advantage
3. Focus on infrastructure and connectivity
With the focus on these, the auto industry would do well in India.
Mr. Chandra Natraja, Managing Director Knorr-Bremse said “10 years ago we had 1 % Electronic Engineers. Today we have 20% of them working on electronic systems. This is the disruption.”
In India, luxury cars are used when the owners go to socialize and not for the daily commute according to Mr. Sankeshwara of Mercedez Benz. “People change cars every 3 years as they see it as an extension of their own personality. In terms of data, Lamborghini knows every single user that they have sold cars to which is about 3457 cars as we have a small dealer network. Feedback of input from our top 100 customers has led to the development of a new car which is the Urus SUV” Said Mr. Gautam Madnani, Business Head Lamborghini. “Old generation used to see owning an automotive as an asset while newer generation being more Finan savvy treats it as a liability “added Mr.Chandra Natraja
Whereas Mr. Madnani brought up the hot topic of how GST affects Lamborghini, GST has made a lot of things easy and smooth for Lamborghini India though the road tax has complicated things as it can differ from 3% to 24% depending upon the state.
To the end “Who owns the customer first is the decision maker in the future” added Mr. Prashant Sankeshwar of Merecedes Benz