Case Study: The Indian Mobility Industry's Evolution Towards 2030

 

Case Study: The Indian Mobility Industry's Evolution Towards 2030

Abstract

India’s mobility sector is undergoing a significant transformation, with projections estimating a market size of $600 billion by 2030. The "Think Mobility Report" by Google and Boston Consulting Group (BCG) highlights the role of emerging technologies, evolving consumer preferences, and innovative business models in driving this growth. This case study delves into key trends such as the rise of electric vehicles (EVs), the growing influence of women and Gen Z in purchase decisions, and the increasing adoption of digital and AI-driven solutions. An analysis of the top five automotive brands in India reveals critical insights into sales, profit margins, and export trends, providing a comprehensive understanding of the industry’s trajectory. The findings underscore the importance of aligning offerings with consumer demands to achieve sustained growth and innovation.

 

Introduction

India’s mobility industry, the third-largest globally, is at the cusp of transformative change. According to the "Think Mobility Report," the sector is projected to surpass $600 billion by 2030. This growth is attributed to a unique blend of traditional revenue streams and emerging trends, setting India apart from global trajectories. With increasing consumer interest in electric vehicles (EVs), shifting preferences for self-drive rentals, and a growing reliance on digital and AI technologies, the landscape is evolving rapidly.

One of the key highlights of this transformation is the rise of EVs, with one in three consumers considering an EV for their next purchase. Women, who now influence 52% of EV purchase decisions, and Gen Z, known for their inclination toward innovative mobility models, are emerging as significant drivers of this change. The growing demand for personalization and digital purchase journeys further underscores the need for Original Equipment Manufacturers (OEMs) to adapt to these shifting dynamics.

This case study explores these trends in detail, focusing on the performance and strategies of the top five automotive brands in India. Through data-driven insights and strategic analysis, it provides a roadmap for stakeholders aiming to capitalize on this transformative period.

 

Key Highlights of the Think Mobility Report

1. Electric Vehicles (EVs): The Future of Mobility
• Consumer Interest: One in three consumers is considering an EV for their next purchase.
• Gender Dynamics: Women now influence 52% of EV purchase decisions, a significant rise from 38% in the ICE segment.
• Preference Divergence:
• Electric Four-Wheelers (E4Ws): Buyers prioritize advanced technology, exclusivity, and sophistication.
• Electric Two-Wheelers (E2Ws): Consumers value practicality, comfort, and affordability.
2. Emerging Mobility Models
• Innovative models like electric, shared, and connected solutions are projected to add $100 billion to the sector.
• Gen Z is 2.7 times more likely to choose self-drive rentals compared to older generations.
• 85% of self-drive rental users express interest in purchasing their rented vehicles.
3. Digital Transformation
• The rise of digital purchase journeys highlights the growing demand for personalization.
• AI’s role in pre-purchase, in-vehicle experiences, and after-sales services is expanding, promising enhanced consumer satisfaction.
4. Used Cars: A Lifestyle Upgrade
• One in four first-time car buyers now considers pre-owned vehicles.
• Lifestyle enhancements, rather than cost-saving, drive this shift.

 

Indian Mobility Market: Analyzing the Top 5 Brands

Sales, Profit, and Export Data (2024)

 

Brand	Domestic Sales (Units)	Export Sales (Units)	Profit (INR Crore)	EV Contribution (%)	Market Share (%)
Maruti Suzuki	1,890,000	250,000	14,000	15	46
Tata Motors	950,000	120,000	9,000	30	23
Hyundai	700,000	170,000	7,200	22	18
Mahindra & Mahindra	550,000	100,000	5,000	20	11
Hero MotoCorp	5,500,000	1,300,000	9,200	12	6

NOTE -2024 data are estimated data

Graph: EV Sales Growth by Brand (2020-2024)

 

The graph titled "EV Sales Growth by Brand (2020-2024)" has been generated and visualizes the growth trends of EV sales for major Indian automotive brands.

 

 

Brand	EV Strategy	Consumer Engagement	Digital & AI Adoption	Export Strategy	Sustainability Initiatives
Maruti Suzuki	Gradual introduction of affordable EVs with a focus on small cars.	Emphasizes traditional values and reliability, targeting middle-class families.	Basic digital adoption with plans for connected vehicle tech.	Limited focus, targeting emerging Asian and African markets.	Introducing hybrid technology before transitioning fully to EVs.
Tata Motors	Aggressive EV rollouts with high-performing models like Nexon EV and Tiago EV.	Focused on urban, tech-savvy customers, emphasizing safety and performance.	Leveraging AI for personalization and predictive maintenance.	Targets Europe, with a strong EV export strategy.	Plans to achieve net-zero emissions by 2045.
Hyundai	High-tech EVs with a focus on advanced features and futuristic designs (e.g., Ioniq series).	Digital-first campaigns, targeting millennials and Gen Z.	Advanced AI in connected cars and autonomous features.	Strong presence in Europe and the Middle East.	Green manufacturing practices and eco-friendly production.
Mahindra & Mahindra	Focus on rugged, practical EVs suitable for urban and rural markets.	Promotes a “Made in India” narrative, focusing on durability.	Moderate AI adoption in vehicle diagnostics and tracking.	Exports to Africa, South America, and parts of Europe.	Promotes sustainable farming through electric tractors.
Hero MotoCorp	Affordable electric two-wheelers like the Vida series, targeting mass-market consumers.	Targets middle- and lower-income groups with value-for-money propositions.	Basic AI adoption for performance tracking in E2Ws.	Dominates two-wheeler exports in South Asia and Africa.	Invests in recycling and renewable energy projects.

This table provides a clear comparison of how each brand aligns its strategies to capture distinct market segments while leveraging its strengths

Here’s additional information that can complement the comparative table and provide a deeper understanding of strategies used by the top brands in India’s mobility industry:

1. Brand-Specific Initiatives

• Maruti Suzuki:
• Plans to launch its first EV by 2025, focusing on affordability and mass adoption.
• Expanding CNG models as an interim eco-friendly option.
• Tata Motors:
• Strong focus on creating an EV ecosystem, including charging infrastructure through Tata Power.
• Consistent government partnerships to promote EV adoption.
• Hyundai:
• Leading in innovation with smart mobility concepts and hydrogen-powered vehicles in the global market.
• Offers subscription-based car ownership for flexibility.
• Mahindra & Mahindra:
• Expanding its "Born Electric" platform with multiple EV concepts unveiled at Auto Expo 2023.
• Collaborating with international firms for EV components.
• Hero MotoCorp:
• Strategic investments in EV startups like Ather Energy to strengthen R&D.
• Extensive dealership network leveraged for affordable EV launches.

 

2. Technological Differentiators

• Connected Cars: Hyundai and Tata Motors lead in connected car technology, providing advanced infotainment and real-time vehicle diagnostics.
• AI Integration: Hyundai and Tata Motors heavily invest in AI for driver assistance and predictive maintenance.
• Battery Innovations: Tata Motors and Mahindra are exploring battery-swapping technology to reduce EV downtime.

 

3. Market-Specific Strategies

• Urban Focus: Hyundai and Tata Motors target urban areas with advanced EV models and premium features.
• Rural Outreach: Hero MotoCorp and Mahindra cater to rural consumers with durable and affordable models.
• Export Strategy: Tata Motors and Hyundai focus on Europe and the Middle East, leveraging their EV expertise, while Maruti Suzuki and Hero MotoCorp emphasize emerging markets.

 

4. Consumer Trends Impacting Strategies

• Gen Z & Millennials: Prefer feature-rich, eco-friendly vehicles, pushing brands like Hyundai and Tata to innovate.
• Women Buyers: Increasing influence in EV purchases, leading brands to create targeted marketing campaigns.
• Used Vehicles: Rising demand for pre-owned cars, prompting OEMs to expand certified used car programs.

 

5. Challenges

• Infrastructure Gaps: Inadequate charging stations hinder EV adoption, especially for brands like Hero MotoCorp focusing on mass-market EVs.
• High Costs: EVs remain unaffordable for many, driving innovation in battery cost reduction and government subsidies.
• Global Competition: Increasing entry of foreign brands like Tesla challenges domestic leaders in premium segments.

 

 

 

Consumer Demographics Driving Growth

Demographic Segment	Key Behavior
Women	Influence 52% of EV purchase decisions
Gen Z	2.7x more likely to opt for self-drive rentals
First-Time Buyers	25% consider pre-owned vehicles

 

Strategic Insights

1. For Manufacturers (OEMs):
• Integrate Digital, Tech, and AI: Tailor products and solutions to evolving consumer preferences.
• Expand EV Offerings: Focus on affordability for E2Ws and technological sophistication for E4Ws.
2. For Policy Makers:
• Encourage adoption of shared and connected mobility through incentives.
• Strengthen EV infrastructure to support growing demand.
3. For Marketers:
• Highlight lifestyle upgrades in used car campaigns.
• Leverage digital platforms to deliver personalized consumer experiences.

Recommendations for All Brands in the Indian Mobility Industry

1. Expand Electric Vehicle (EV) Ecosystem
• R&D Investment: Focus on developing cost-effective and long-range EV batteries to make EVs more affordable and efficient.
• Charging Infrastructure: Collaborate with government and private players to establish widespread and reliable charging networks.
• Battery Recycling: Develop sustainable practices for battery disposal and recycling to address environmental concerns.
2. Focus on Consumer-Centric Innovation
• Digital Integration: Enhance connected car technologies with AI-driven features like predictive maintenance, real-time navigation, and personalized infotainment.
• Customization Options: Offer modular design options and tailor-made packages to appeal to diverse consumer preferences.
• Subscription-Based Ownership: Introduce subscription and leasing models to attract younger generations and urban consumers seeking flexibility.
3. Strengthen Marketing and Consumer Outreach
• Target Women and Gen Z: Design campaigns highlighting EV safety, sustainability, and technology to appeal to these growing demographics.
• Educate Consumers: Organize awareness programs about EV benefits and government incentives to encourage adoption.
• Used Car Promotions: Highlight certified pre-owned vehicle programs as lifestyle upgrades rather than budget alternatives.
4. Enhance Sustainability Practices
• Green Manufacturing: Adopt eco-friendly practices across manufacturing processes to align with global sustainability goals.
• Carbon-Neutral Goals: Commit to net-zero emissions by specific timelines, reinforcing brand credibility in sustainability.
5. Expand in Rural and Emerging Markets
• Affordable Solutions: Develop cost-efficient models tailored for rural markets with robust after-sales support.
• Hybrid Models: Promote hybrid vehicles as transitional solutions in regions with inadequate EV infrastructure.
6. Leverage Partnerships and Collaborations
• Tech Collaborations: Partner with technology firms to innovate in areas like autonomous driving and advanced infotainment.
• Government Alliances: Work with policymakers to influence favorable regulations, subsidies, and infrastructure projects.
• Startups: Invest in mobility startups to gain insights and strengthen offerings in EVs and connected technologies.
7. Address Export Opportunities
• Global Standards: Ensure vehicles comply with international standards to boost exports to Europe, the Middle East, and Africa.
• Specialized Models: Develop country-specific models for targeted markets to enhance brand acceptance.
8. Foster Workforce Development
• Skill Development: Train employees on EV-specific technologies, including battery assembly and digital integration.
• Inclusive Workplaces: Promote diversity in the workforce, reflecting consumer demographics like women and Gen Z.
9. Boost Financial Incentives
• Flexible Financing: Offer competitive loan and lease options to make EVs and premium models accessible to more consumers.
• Subscription Pricing: Explore innovative payment models like pay-per-use or mileage-based pricing to attract budget-conscious buyers.
10. Build Trust Through After-Sales Support
• Warranty and Maintenance: Offer extended warranties and transparent service plans, especially for EVs.
• Digital Support: Develop apps for real-time customer assistance, bookings, and maintenance scheduling.

 

 CONCLUDING REMARKS 

By embracing these strategies, brands can align their offerings with consumer expectations and industry trends, ensuring sustained growth and competitive advantage in the rapidly evolving Indian mobility market.

India’s mobility industry is on the brink of transformative change, supported by emerging technologies and evolving consumer priorities. Brands that effectively harness innovations in EVs, digitalization, and AI are well-positioned to lead the market. By aligning offerings with consumer demands and embracing sustainability, the industry can achieve its ambitious $600 billion projection by 2030.

 

Discussion Questions

1. How can Indian OEMs address the distinct demands of E2W and E4W consumers?
2. What role can AI and digital tools play in enhancing consumer journeys?
3. How should brands leverage the growing influence of women and Gen Z in the EV market?
4. What policies can the government implement to support shared and connected mobility models?
5. How can companies capitalize on the shift toward pre-owned vehicles as a lifestyle upgrade?

 

Teaching Notes

• Learning Objectives:
• Understand the factors driving growth in India’s mobility industry.
• Analyze consumer behavior and demographic trends shaping the market.
• Explore strategies for leveraging digital and AI technologies.
• Case Usage:
• Ideal for MBA courses on marketing, consumer behavior, and strategy.
• Suitable for workshops on emerging business models in the automotive sector.

 

References

1. Google & Boston Consulting Group. (2023). Think Mobility Report.
2. Janakiraman, V. (2023). Comments at the Bharat Mobility Auto Expo.
3. Ramesh, B. (2023). Insights on digital transformation in mobility.
4. Sankar, N. (2023). Perspectives on EV market dynamics.
5. Industry Sales Data. (2023). Analysis of Indian automotive brands.