India is at a pivotal point in global economic history today. The country is racing ahead in growth indices globally even when the usual front runners are showing signs of a slowdown. The automotive sector is one of the biggest indicators of India’s economic uptick. The auto market in the world’s most populous country is estimated to reach the USD 300 billion mark as early as 2026. The sector is poised to be one of the strongest globally by the turn of this decade. Thanks to the Indian Manufacturers adopting increased Localized manufacturing, factoring in Sustainability in their manufacturing processes, lowering carbon emissions, increased focus on passenger safety, customer convenience, and comfort, etc. aided by the Indian Government’s initiatives such as ‘Make-in-India’, Atmanirbhar Bharat, Production linked Incentive schemes, etc.

It is estimated that the auto component sector in India employs more than 1.5 million people across the country. Therefore, evolution, innovations, and growth stories from the sector have the potential to impact the country’s domestic GDP significantly.

The promise of growth for India’s auto sector also throws many opportunities for auto ancillary manufacturers. From seat components to engine parts and infotainment systems, the ecosystem of automotive ancillaries will witness tremendous growth in lockstep with the auto sector.

Let’s examine these opportunities more and look at what auto ancillary companies will need to do to avail them.

Opportunities galore

We have already looked at the prospective numbers for the auto sector in the coming years. What is interesting to note is that the growth will also include new opportunities for auto ancillary makers. The biggest example is in the EV space. Electric vehicles of all sizes are expected to grab a significant portion of the Indian automotive space in the coming years.

This means that from charging infrastructure to batteries, there are a host of products that demand attention from ancillary manufacturers for mass production. Once considered an expensive and limited scalability option, the mass penetration of EVs will help ancillary makers benefit from economies of scale.

As the government invests heavily in smart transportation solutions for urban centers, ancillary manufacturers get an opportunity to explore new product innovations for not just 4-wheelers, but even larger options like buses that run on alternative fuels or electricity.

How can automotive ancillary businesses ride the boom in India’s automotive sector?

Be it ICEs or EVs, India’s auto sector is witnessing massive transformations. From the adoption of large-scale automation initiatives across existing production facilities to building new smart factories from scratch, OEMs are expanding strategically to win market share early. For ancillary manufacturers, this is also the path that they need to pursue to stay at pace with the sectoral boom in demand.

The Auto Ancillary industry, being a highly competitive market to crack, requires manufacturers to adopt newer technologies that help improve their business operations and shore up their customer experiences to higher levels. That said, determining the right price of its product is of paramount importance in ensuring a sustained market presence and growth. On this note, let us explore 3 key areas where auto ancillary companies must focus on implementing the right technologies to beat the competition in pricing and stay profitable:

Sourcing

The Auto Ancillary industry, being a highly competitive market to crack, requires manufacturers to adopt newer technologies that help improve their business operations and shore up their customer experiences to higher levels. That said, determining the right price of its product is of paramount importance in ensuring a sustained market presence and growth.

Departmental collaboration

The degree of efficiency in operations will depend heavily on how well different business teams can collaborate in the decision-making process. The same principle works for pricing as well. Different departments must have an informed say in the pricing decisions made. To facilitate this, it is extremely important to use technology to establish visibility on information from multiple internal business units. With appropriate visibility, it becomes easier to ensure transparent involvement from different business heads while fixing a price scheme. For example, the logistics department can help in providing inputs on customer-specific freight charges; the finance team can provide info on margins based on costs involved in raw materials, and much more.

Accommodating market sentiments

Knowing how the market is set up in terms of pricing of similar competitor products can help auto-ancillary brands arrive at a very lucrative pricing model for their offerings that meets the needs of the CFO as well as the Sales Head. Using accurate data-driven insights will help in determining base price points which sales teams can further use to offer competitive bids or quotations that help sway leads into deals while at the same time ensuring profitability.

The right solution can help with the right pricing

The right pricing strategy can play a major role in ensuring business sustainability for auto ancillary makers. Such businesses need an end-to-end pricing solution that helps them unify insights from internal operational systems like ERP and external market intelligence. Such a solution will help them maintain the most profitable and competitive product pricing model.