Uno Minda’s Anand Kumar writes about how artificial intelligence is revolutionizing automotive aftermarket industry
The automotive aftermarket industry has not only overcome the setback of the pandemic but is now thriving more than ever registering its highest-ever turnover of ₹ 85,333 crore (USD 10.6 billion) in the financial year 2022-23, registering a growth of 15% as compared to ₹ 74,203 crores (USD 10.0 billion) in FY22, according to a recent report by Automotive Component Manufacturers Association of India (ACMA).
This growth is attributed to pent-up vehicle demand which boosted sales, easing supply shortages, and sales mix favouring larger vehicles. Furthermore, by raising the demand for replacement parts, repairs, and maintenance services, trends like the desire for shared mobility and the expansion of used cars in India are fueling these changes. This is driving the industry towards exploring newer growth opportunities, using digitization and modern AI technology models like Industry 4.0, IOT, Machine Learning, Big Data, Data Analytics etc.
Artificial intelligence especially is going to play a significant role in driving the paradigm shift towards digitalization and consumer interests in personalisation, automation, connectivity, and electrification (PACE) in the automotive aftermarket in India. Innovations such as driving assistant systems leverage AI-based technology such as automatic speed control or cruise control systems.
Adaptive cruise control is especially useful on the highway, where it can be difficult for drivers to maintain a long-term visual of their speed and other vehicles. A more advanced cruise control allows the vehicle’s speed to be managed autonomously, including acceleration, deceleration, and occasional halting, all contingent on the presence and movement of other objects in the immediate vicinity.
In the automotive sector, OEMs, Tier 1, and Tier 2 manufacturers are embracing a digital revolution through tools like Data Management Systems (DMS). Beyond creating car components, they’re integrating AI/ML technologies to extract actionable insights from transaction data, transforming their approach to customer satisfaction. AI, once puzzled by consumer behaviours, now predicts issues swiftly, enabling the industry to maintain well-stocked accessory inventories, reducing shortages, and curbing overproduction losses.
A prime example is cognitive predictive maintenance, where technicians armed with sensors and OBD (On-Board Diagnostics) assess vehicle health in real time. This predictive prowess detects operational flaws early, preventing potential catastrophic failures. The amalgamation of data digitization, AI, and ML marks a paradigm shift, enhancing efficiency and customer service in the automotive aftermarket realm.
To further elaborate on the omnipresent role of AI in shaping the market, one can consider the industry’s distribution channel. In contrast to the traditional supply chain full of middlemen, today consumers can directly purchase vehicle components from online platforms, post-pandemic, there has been a dramatic shift to online shopping, and retailers have no option but to digitize their inventories & sales transactions.
They are using AI-enabled algorithms to provide relevant information and suggestions to their customers. Naturally, this means that consumers can make faster, more informed decisions, while service providers can increase cross-selling and upselling opportunities.
The advent of AI has facilitated a dramatic shift from a product-centred business model to one that is more consumer-centric, with a strong emphasis on service quality. This has prompted Auto components manufacturers to rethink their distribution channels to keep up with the changing digital landscape, where brand awareness will be critical to upselling their products.
In the coming years, AI will undoubtedly change how the aftermarket industry operates driven by changing consumer expectations and priorities. Nonetheless, personalization, automation, connectivity and electrification will gain more eminence.
This article was written by Anand Kumar, Uno Minda’s product and strategy head. More about him:
Anand Kumar, Head Strategy & Product, Uno Minda Limited
Anand is an exemplar in the realm of strategic management. With an illustrious career spanning over 21 years across diverse sectors including Automotive, Mining, and Capital Equipment, Anand has left an indelible mark with his exceptional ability to conceive and implement transformative strategic frameworks that propel businesses to new heights. His expertise spans Strategic Business Planning, Product and Brand Management, Global Business Development, Sales & Distribution Management, and Data Analytics.
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