At the 6th Auto Retail Conclave hosted by the Federation of Automobile Dealers Associations (FADA), Dr Hanif Qureshi, Additional Secretary at the Ministry of Heavy Industries, Government of India, explained the transformative role of technology and artificial intelligence (AI) in the growth and development of automobile dealerships in India. His remarks underline the vital role dealerships play in the country's auto industry and the government's commitment to supporting their evolution through technology.
Dr Qureshi emphasised the Government of India’s focus on fostering sustainable transportation, cleaner fuels, and the widespread adoption of electric vehicles (EVs). He acknowledged the rapid advancements in India’s automotive sector and the industry's critical role in shaping the nation's economic future. The event provided a platform to explore how auto dealerships can evolve with technological advancements and how the Ministry of Heavy Industries is open to working closely with FADA to achieve these goals.
The Indian automobile industry has crossed INR 20 lakh crore in value, positioning itself as a key player in the global market. India is now the world’s largest manufacturer of three-wheelers, the second-largest in two-wheelers, and has recently risen to become the third-largest in passenger vehicles. This growth has contributed more than 7% to the country's GDP, reflecting the sector's importance.
However, Dr Qureshi noted that while the auto industry has made tremendous strides, there is still significant room for improvement, particularly in the dealership ecosystem. Dealerships are the crucial link between manufacturers and consumers, and their efficiency, service quality, and technological adaptation play a vital role in customer satisfaction and the industry's overall growth.
One of the key aspects of Dr Qureshi’s address was the potential for technology and AI to revolutionise the way dealerships operate. He highlighted that reducing the reliance on physical paperwork and streamlining processes through digital platforms could significantly improve the customer experience. The Ministry of Heavy Industries has been working with FADA to explore digital management systems that can interface with government portals, simplifying registration processes and minimising the need for manual paperwork.
Moreover, Dr Qureshi discussed the integration of biometrics and face recognition technologies into the vehicle buying process, an initiative aimed at improving authentication methods and enhancing customer convenience. He explained that the government is in talks with the Unique Identification Authority of India (UIDAI) to implement these technologies, which would allow buyers to complete registrations and other formalities using their mobile devices. This would not only streamline the process but also enhance security and accuracy.
Dr Qureshi also mentioned that AI could be utilised to personalise customer experiences, offering tailored services and support based on individual preferences and behaviours. This could help dealerships better understand customer needs, improve lead generation, and optimise after-sales services. By leveraging AI for data analysis, dealerships can anticipate customer demands and enhance their operational efficiency.
He pointed out that electric vehicles have seen remarkable growth in recent years. Sales of electric cars nearly doubled from 45,000 units in 2022-23 to approximately 95,000 units in 2023-24, with further growth expected in the coming years. The electric three-wheeler market has also experienced rapid expansion, with 52% of new three-wheelers sold being electric. This shift towards EVs is driven not only by government initiatives but also by increasing consumer demand for sustainable mobility solutions.
Stressing on the importance of collaboration between the government and industry stakeholders in addressing the challenges facing the EV sector, he invited FADA to be a part of the Ministry’s 11 task forces, which have been established to drive the automotive mission plan. These task forces cover key areas such as two-wheelers, three-wheelers, rare earth metals, and skill development, all of which are crucial to the long-term growth of India’s automotive sector.
Dr Qureshi emphasised the need for more research and development (R&D) within the Indian auto industry to reduce reliance on foreign technology and components. He called for increased innovation to maintain the rapid growth of the sector, particularly in the electric vehicle space.
Furthermore, the government’s commitment to simplifying regulatory processes, improving vehicle registration systems, and fostering sustainable transportation will provide dealerships with the tools and support they need to thrive in this new environment.
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