TITLE OF PROJECT

Navigating Digital Disruption: A Comprehensive Study on the

Transformational Impact of Industry 4.0 on Global Employment with
special reference to Automobile Industry

For the partial fulfillment of the requirement of the degree of MBA (2023-25)

MBAT 208 STATE OF THE ART PROJECT REPORT

Submitted by:

Priyam Dutta

ERP ID: 0231MBA111

University Roll No:

Under the Supervision of:

Prof. Shivani Aggarwal

Department of Management studies

Doon Business School, Dehradun

June, 2024
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A Comprehensive Study on the Transformational Impact of Industry 4.0 on
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submitted to Doon Business School, is a Bonafide record of work done by Priyam
Dutta under my supervision from “05/02/2023” to “20/04/2023”.

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 Table Of Contents

S. CONTENTS PAGE
NO NO.
1 Introduction 5-15
2 Technological Disruptions in Industry 4.0 16-23
with special reference to Automobile
Industry
3 Moving forward: How automotive players 24-25
should align their strategic priorities
4 Industry 4.0 in the automobile sector in India 25-26
5 Electric vehicles manufacturing and its 26-28
impact on jobs
6 Automobile Industry in India 28-34
7 Embracing the Future of Remote Work 34-35
8 Real World Example 35-36
9 Industrial Automation 36-38
10 Example related to Automobile Industries 38-39
11 Case Studies 39
12 Conclusion 40
13 References 40
 Introduction
The Industrial Revolution, in modern history, was the process of change from an agrarian and
handicraft economy to one dominated by industry and machine manufacturing. These
technological changes introduced novel ways of working and living and fundamentally
transformed society.

Historical background

Industry 1.0

Industry 1.0 is the first industrial revolution. It began in England, in the 18th century; it covered
the period from around 1760 to 1840. By the latter period of the 18th century, the industrial
revolution had already spread to the United States. Industry 1.0 is related to the mechanization
of production and vast usage of steam power. It also marked the first major transition from a
handicraft economy to one involving the use of machines in the manufacturing processes.
The industries that were impacted by industry 1.0 included the glass, mining, agriculture and
textile industries. For example, before the revolution, threads and textiles were manufactured
at home using simple spinning wheels. The basic tools, materials and equipment used to make
the textiles were usually provided by merchants. Using these tools made it difficult to manage
production, and also to produce large quantities of items.

However, with the uprising of industry 1.0, mechanization was introduced in the production
process, leading to faster processes and relatively large-scale production. In fact, the
mechanized version led to a thread production that was eight times more in volume than the
former production process.

While steam power was already known, it hadn’t yet begun to be used in industrial processes.
Therefore, when its usage was introduced in the industry, it was considered the biggest
breakthrough ever made during this era. Not only did steam power lead to the production of
higher volumes, but it also led to a significant increase in human productivity. For example,
rather than employing people to power weaving looms, steam engines were used to provide
adequate power for the machines.

The industry 1.0 Technologies-

The landmark technologies that characterized industry 1.0 were the machines powered by water
and steam. A good example of such machines is the weaving loom which was first developed
in 1784. Other machines that were invented during this period include the water wheel, more
complex spinning wheels and the steam engine.

These newly invented machines allowed workers to produce goods in large quantities. Also,
they made the production process much more efficient and cost-effective. As a result, most
small businesses grew and developed to become large organizations that served a larger number
of people. The advancement of technologies especially brought significant benefits to the
textile and transportation industries. These benefits became even more evident when coal began
to be used as an additional source of fuel for different manufacturing processes.

One major downside of the first industrial revolution was that there was greater demand for
production machines than the supply. After all, these machines had just been invented, which
meant that there were relatively fewer machines and technologies to meet all the customers’
demands. This led to more pressure, especially on workers who were considered the lower
class. These workers were forced to work for long hours, and under unhealthy working
conditions. However, in 1833, the Factory Act was put in place in the UK to ensure that high
standards were followed in all workplaces, guaranteeing the safety and protection of all
employees.

Industry 2.0
The second industrial revolution (Industry 2.0) began in the 19th century, around the 1870s. It
mainly occurred in Germany, America and Britain. Some historians also refer to this period as
the “Technological Revolution” era. It mainly involved industrial processes that used machines
powered by electrical energy.

Up until this point, industries were already using electricity as one of the driving forces.
However, it was not until the second industrial revolution that electrical machines were
invented. Compared with the water and steam-based machines, electrical machines were much
more efficient, easier to operate and maintain. More so, they were very cost-effective, requiring
fewer resources and human effort than the machines used during the first industrial revolution.

Industry 2.0 also featured a more streamlined mass production process. This happened after
creating the first assembly line, which made it easier to produce items in larger volumes and
better quality. In fact, mass production of items was considered a standard practice during this
period.

Another notable aspect of the second industrial revolution was the improvement in the industry
culture. During industry 1.0, management programs were introduced through the 1833 Factory
Act; these programs not only ensured that manufacturing facilities were highly efficient but
also ensured that employees worked for reasonable hours and were protected.

During industry 2.0, more techniques and programs were put in place to improve the quality of
output and ensure better management of production. These techniques involved lean
manufacturing principles, allocation of resources, just-in-time manufacturing strategies and a
better division of labor. And among the many innovative people who brought about these
effective strategies and techniques was Frederick Taylor; an American mechanical engineer
who studied labor patterns, enabling efficient workplaces and better optimization of the
worker’s time.

The industry 2.0 Technologies-

There are many technological systems that were developed during the second industrial
revolution. The major aspect of this era was the use of electrical energy and steel in production
industries. The use of electricity made it possible for many industries to incorporate modern
production lines and carry out mass production of goods. Also, industry 2.0 was characterized
by extensive telegraph and railroad networks. These networks facilitated a faster transportation
system. More so, it allowed for faster communication and transfer of information.

In 1901, Ransom E. Olds established the very first assembly line. As the producer of
Oldsmobile cars, Ransom started a system that produced at least 20 units each day. And in just
one year, the company increased its production, registering an output that was 500% more than
their former output. Thanks to the creation of more vehicles by Oldsmobile, this period saw a
major decrease in the overall pricing of automobiles. More so, the technological systems used
by the company served also as a model for Henry Ford.

Industry 3.0
The third industrial revolution is also commonly referred to as the ‘Digital Revolution’ or the
‘First computer era.’ It began in the 20th century, around the 70s. During this period, simple,
yet relatively large computers were developed. These computers had quite good computing
power, and they laid a strong foundation for the development of modern-day machines.

The industrial revolution 3.0 began through partial automation; a technological process that
was achieved using simple computers and Programmable Logic Controllers (or memory-
programmable controls). Before the revolution, some simple automated systems had been
developed. However, these still relied heavily on human intervention and input.

Information technology (IT) and electronics were introduced in many production processes,
furthering automation in the manufacturing processes. Furthermore, the automation processes
advanced even further following the use of renewable energy in the production industries, as
well as the development of connectivity and internet access.

It is crucial to note that Industry 3.0 (the third Industrial revolution) is still present even today.
In fact, most modern-day factories and production industries are currently at this evolution
level. And it is due to the invention of these technologies that we can now automate entire
production processes. Good examples of these are robots which can be programmed to perform
certain activities by themselves, without any human intervention.
The industry 3.0 Technologies-

During the latter period of the 20th century, great advancements were made in the electronics
industry. For example, different varieties of electronic devices were invented, such as
integrated circuits and transistors. These electronic devices brought about a partial automation
of the machines which were used in the production processes. In turn, this led to greater
accuracy in production, increased speeds, better competency, and even replacement of human
labor in some manufacturing processes.

In the 1960s, the Programmable Logic Controller (PLC) was invented; one of the landmark
inventions that triggered automated processes using electronics. Also, the incorporation of
electronic machines in the production processes led to a demand for software systems to control
this electronic hardware. Consequently, this fueled the software development market of the
time.

In addition to enabling electronic devices, the software systems also made it possible to carry
out different management processes. For example, activities such as inventory management,
tracking of products, enterprise resource planning, scheduling of product flows and shipping
logistics were enabled by the software systems. And from that period, the systems are
constantly being developed and automated using information technology and electronics.

Other electronic machines that were invented during the third industrial revolution include
integrated circuit chips, digital logic systems, MOS transistors, as well as their respective
derived technologies, such as the Internet, computers, digital cellular phones and
microprocessors. Simply put, the digital revolution era converted the existing analogue world
into a modern digital world.

Industry 4.0
Fourth industrial revolution is taken up by German Industrial Engineers and endorsed by the
chancellor Angela Merkel.

Fourth industrial revolution (4.0) focuses on cyber-physical systems.

The concept of Industry 4.0 was first used in Hanover meeting in 2011, by a group of people
from different fields to enhance German competitiveness in manufacturing industry.

We know that humans are prone to committing errors and performing repetitive work again
and again brings errors frequently due to fatigue and monotonicity.
Cyber-physical systems mean physical systems will be connected and communicate with each
other through cyber space, every system/machine will have its unique identity over the cyber
space through which it will communicate with other systems. each system will be using
network relay systems like wireless network card or RFID tags, Bluetooth, WI-FI, etc. each
system will perform self-diagnostics to generate its state, collect and analyze data which was
earlier cumbersome to manage because some data are not structured and make intelligent
decisions.

Industry 4.0 will utilize-

i. Cloud technology- intent is sharing of resources.

ii. 5G technology- network technology used for communication i.e. voice and data
transfer at a very high speed.
iii. Block-chain technology- used in maintaining transactions across.
iv. Artificial Intelligence & Machine learning- human intelligence mimicking.
v. IoT devices technology- mobile & other devices connected through internet.
vi. Cognitive technology- making human-like decisions in complex situations.
vii. Robotic Process Automation (RPA)- human actions mimicking.

At present these technologies are moving fast by automating the processes and systems
including machines. Systems machines/ devices/processes will interact with each other using
5G technology, sharing data and knowledge using cloud technology, analyzing and making
decisions using machine intelligence, performing self-diagnostics and mimicking human
actions just as humans do and creating a green & cleaner environment.

Every technology has its pros. & cons. every industry is gearing with these technologies like
we have smart Mobiles, smart consumer electronics ( Smart Tv's, Alexa device- listening and
performing actions instructed to it, smart lighting, etc.), smart factories, smart stores like
Amazon stores- you need not to stand in queues just pick items of your choice and move out
of the store rest will be done automatically through AMAZON app using Block-chain
technology, smart hospitals where robots will perform surgeries, automotive industry-driver
less car.

As technology is advancing its vulnerabilities are also coming up like driver less car has met
to an accident also it will be accident prone if used on routes where humans commute, Alexa
device listens to all your conversations, smart TV if left powered someone might hack your
devices and create trouble for you.
We need to be careful while using these devices and strictly follow the intended functions and
instructions until vulnerabilities are plugged in.

Global Employment
Global employment (sometimes also referred to as international employment or cross-border
employment) simply means that a company works with a global workforce whose members
are distributed across different countries all over the world.

The global economy is on the precipice of a Fourth Industrial Revolution – defined by evolving
technological trends that have the potential to fundamentally change life for millions of people
around the world. Increasingly, technology is connecting the digital world with the physical
one, resulting in new innovations such as artificial intelligence and self-driving cars.
Smarter machines and devices bring many advantages, while new technologies make
production and use of new inventions cheaper and easier than ever. But automation can also
cost workers jobs.
Based on a study of the labor force in 46 countries, McKinsey Global Institute concludes that
almost half of work activities globally have the potential to be automated. Helping workers to
acquire new skills is crucial.

Automobile Industry

Automotive industry, all those companies and activities involved in the manufacture of motor
vehicles, including most components, such as engines and bodies, but excluding tires, batteries,
and fuel. The industry’s principal products are passenger automobiles and light trucks,
including pickups, vans, and sport utility vehicles. Commercial vehicles (i.e., delivery trucks
and large transport trucks, often called semis), though important to the industry, are secondary.

History
Although steam-powered road vehicles were produced earlier, the origins of the automotive
industry are rooted in the development of the gasoline engine in the 1860s and ’70s, principally
in France and Germany. By the beginning of the 20th century, German and French
manufacturers had been joined by British, Italian, and American makers.

Developments before World War I

The early days of the automobile industry were characterized by a multitude of small-scale
producers, many of which quickly exited the market after attempting to enter it. However, a
select few companies managed to thrive and transition into large-scale production. These
successful enterprises typically shared origins in three distinct categories: bicycle
manufacturers, builders of horse-drawn vehicles, or machinery manufacturers.

Among machinery manufacturers, various specialties emerged, including stationary gas

engines, marine engines, machine tools, and household appliances like washing machines and
sewing machines. Unconventionally, some companies initially produced unrelated items such
as birdcages or plumbing fixtures, later transitioning to automobile manufacturing. Two
notable exceptions to the general pattern were Rolls-Royce in Britain and Ford in the United
States, both of which were founded as carmakers by partners who combined engineering talent
and business skill.

In the United States, most automobile producers operated as assemblers, sourcing components
from various suppliers and combining them into finished vehicles.

Early automobile pioneers faced critical decisions regarding which propulsion technology to
pursue, with experimentation spanning gasoline, electric, and steam power. While electric cars
briefly enjoyed popularity due to their quiet operation, limitations in battery capacity hindered
their competitiveness. Steam-powered vehicles, though easy to operate, faced challenges
related to high costs and maintenance complexities, leading most manufacturers to adopt
gasoline power by 1910.

The industry's infancy was also marked by patent disputes, notably in Britain and the United
States, where legal battles ensued over comprehensive patents. These disputes ultimately led
to the establishment of regulatory bodies and agreements for cross-licensing patents, promoting
collaboration and standardization within the industry.

Mass production
The automotive industry's pivotal contribution to technological progress was the
implementation of full-scale mass production, characterized by precision, standardization,
interchangeability, synchronization, and continuity. This transformative process, primarily an
American innovation, capitalized on the country's large population, high living standards, and
extensive transportation needs. While elements of mass production had been explored in the
19th century, it was in the United States that these techniques were refined and applied to the
manufacturing of complex mechanisms like motor vehicles.

Referred to as "the American system of manufacture," this approach emphasized

standardization and interchangeability, concepts that had been experimented with in Europe
but found their zenith in American industry. A notable demonstration of interchangeability
occurred in 1908 when three Cadillac cars were disassembled, their parts mixed, and then
reassembled using randomly selected replacements, showcasing the precision and uniformity
achieved.

Henry M. Leland, founder of Cadillac Motor Car Company, orchestrated this demonstration
and later collaborated with renowned electrical engineer Charles F. Kettering to develop the
electric starter, a significant innovation that enhanced the appeal of gasoline-powered
automobiles. This partnership exemplified the industry's ongoing pursuit of technological
advancement and consumer acceptance.

Ford

Henry Ford was the first person to bring about the idea of mass production. He cultivated a
keen interest in how the pigs at a Chicago slaughterhouse would be hung on conveyor belts.
There were different butchers, and each would perform just part of the work of butchering the
pigs. Henry then applied these principles into the production of automobiles, changing how the
process used to be carried out.

For instance, before his invention, only one station would assemble the whole automobile.
However, by applying the principles that he learnt from the conveyor belts and distribution of
labor, Henry created a new system where all vehicles would be produced step by step, on a
conveyer belt. This invention made the production of automobiles much faster and cost-
effective. Henry Ford is also credited as the father of automotive mass manufacturing.

Henry Ford is often credited with pioneering mass-produced automobiles, but Ransom E. Olds
also played a significant role with the curved-dash Oldsmobile in 1901, though it lacked
durability. Ford's Model T, introduced in 1908, aimed to fulfill his vision of an affordable car
for the masses, prioritizing durability, economy, and ease of maintenance for rough American
roads. Ford revolutionized production with the moving assembly line, showcased in 1913,
featuring conveyor systems and specialized tasks for workers. Despite limited model
variations, the Model T's price plummeted from $950 in 1909 to $290 in 1926, thanks to
assembly line efficiencies. By then, Ford controlled half of global automobile production. This
narrative underscores the collaborative efforts and technological innovations that fueled the
rise of mass-produced automobiles, with Ford's Model T emerging as an iconic symbol of
accessible transportation.

The Big Three

1. General Motors

1.1 Chevrolet

1.2 GMC

1.3 Cadillac, etc.

2. The Ford Motor Company

3. Chrysler

3.1 Alfa Romeo

3.2 Chrysler

3.3 Dodge

3.4 Fiat

3.5 Jeep

3.6 Maserati, etc.

The automotive industry in World War II

During World War I, the automotive industry's productive capacity demonstrated its military
value through extensive use in transport and supply. Automotive plants easily transitioned to
manufacturing military equipment like tanks and aircraft, although this conversion was often
improvised after hostilities began. While the American industry was involved for only a brief
period, its full capacity was not utilized.

As World War II approached, greater preparation was made for utilizing automotive resources.
The British government established "shadow factories" adjacent to automotive plants, equipped
to shift to military production, particularly aircraft. France attempted conversion, albeit
belatedly and inefficiently. The German automotive industry, vital for blitzkrieg tactics, fully
converted to military production by 1943. In the United States, industrial mobilization
preparation was minimal until 1940, with no serious effort to restrict civilian automobile
production until after the attack on Pearl Harbor in 1941.

However, once harnessed for war production, the American automotive industry made a
tremendous contribution, producing nearly $29 billion worth of military materials between
1940 and 1945. This included 2.6 million military trucks, 660,000 jeeps, and a range of other
equipment such as machine guns, tanks, helmets, and aerial bombs. Automotive companies
played a critical role, providing half of the machine guns and carbines, 60% of the tanks, all
armored cars, and most military helmets and bombs in the United States.

While automotive facilities were assumed to be easily convertible for aircraft production,
challenges arose. Automobile assembly plants were not suited for airframe production,
requiring substantial modifications. Similarly, converting engine factories posed difficulties.
Despite these challenges, automotive companies eventually contributed significantly to aircraft
production.

Britain, possessing the world's second-largest automotive industry, was better prepared for
wartime conversion. Shadow factories facilitated aircraft production, involving companies like
Austin, Morris, and Ford. Leyland Motors and Vauxhall manufactured tanks, while Lord
Nuffield established a system for aircraft repairs, utilizing Morris Motors' sales and service
network.

In contrast, smaller automotive industries of other belligerents focused primarily on meeting

the demand for vehicles. In Germany, Ford properties and Volkswagen produced vehicles for
military use. Renault, a tank manufacturer since World War I, supplied tanks to France and
later Germany.

Overall, the automotive industry played a crucial role in both world wars. While challenges in
conversion existed, automotive companies ultimately contributed significantly to military
production, demonstrating the adaptability and productivity of the industry in times of conflict.

Technological Disruptions in Industry 4.0 with special

reference to Automobile Industry
The automotive industry is undergoing significant transformation driven by emerging markets,
technological advancements, sustainability initiatives, and shifting consumer preferences. This
evolution is marked by four disruptive trends: diverse mobility, autonomous driving,
electrification, and connectivity. These trends are expected to synergize and accelerate each
other, prompting widespread agreement among industry experts regarding imminent
disruption. However, a comprehensive perspective on the industry's future remains elusive.
This study aims to address this gap by providing eight key perspectives on the "2030
automotive revolution," offering scenarios on how these trends will reshape traditional players,
new entrants, regulators, consumers, markets, and the automotive value chain.

❖ Driven by shared mobility, connectivity services, and feature

upgrades, new business models could expand automotive revenue
pools by about 30 percent, adding up to $1.5 trillion.

The automotive revenue pool will significantly increase and diversify toward on-demand
mobility services and data-driven services. This could create up to $1.5 trillion—or 30 percent
more—in additional revenue potential in 2030, compared with about $5.2 trillion from
traditional car sales and aftermarket products/services, up by 50 percent from about $3.5 trillion
in 2015.

Connectivity, and later autonomous technology, will increasingly allow the car to become a
platform for drivers and passengers to use their time in transit to consume novel forms of media
and services or dedicate the freed-up time to other personal activities. The increasing speed of
innovation, especially in software-based systems, will require cars to be upgradable. As shared
mobility solutions with shorter life cycles will become more common, consumers will be
constantly aware of technological advances, which will further increase demand for
upgradability in privately used cars as well.

❖ Despite a shift toward shared mobility, vehicle unit sales will continue
to grow, but likely at a lower rate of about 2 percent per year.
Overall global car sales will continue to grow, but the annual growth rate is expected to drop
from 3.6 percent over the last five years to around 2 percent by 2030. This drop will be largely
driven by macroeconomic factors and the rise of new mobility services such as car sharing and
e-hailing.

A detailed analysis suggests that dense areas with a large, established vehicle base are fertile
ground for these new mobility services, and many cities and suburbs of Europe and North
America fit this profile. New mobility services may result in a decline of private-vehicle sales,
but this decline is likely to be offset by increased sales in shared vehicles that need to be
replaced more often due to higher utilization and related wear and tear.

The remaining driver of growth in global car sales is the overall positive macroeconomic
development, including the rise of the global consumer middle class. With established markets
slowing in growth, however, growth will continue to rely on emerging economies, particularly
China, while product-mix differences will explain different development of revenues.

❖ Consumer mobility behavior is changing, leading to up to one out of

ten cars sold in 2030 potentially being a shared vehicle and the
subsequent rise of a market for fit-for-purpose mobility solutions.
Changing consumer preferences, stringent regulations, and technological advancements are
reshaping individual mobility behaviors. Increasingly, consumers opt for multi-modal
transportation options, with goods and services being delivered rather than fetched. This shift
challenges the traditional car sales model, especially in urban areas discouraging private-car
use. Consumers now seek on-demand mobility solutions via smartphones, reflecting a decline
in private-car ownership, evidenced by decreasing driver's license holders and a surge in car-
sharing members. Tailored solutions for specific needs emerge, such as vehicles designed for
e-hailing services. This transition to diverse mobility could see up to one in ten new cars sold
in 2030 being shared vehicles, potentially rising to one in three by 2050, altering the landscape
of private-use vehicle sales significantly.

❖ City type will replace country or region as the most relevant

segmentation dimension that determines mobility behavior and, thus,
the speed and scope of the automotive revolution.

Understanding where future business opportunities lie requires a more granular view of
mobility markets than ever before. Specifically, it is necessary to segment these markets by
city types based primarily on their population density, economic development, and prosperity.
Across those segments, consumer preferences, policy and regulation, and the availability and
price of new business models will strongly diverge. In megacities such as London, for example,
car ownership is already becoming a burden for many, due to congestion fees, a lack of parking,
traffic jams, et cetera. By contrast, in rural areas such as the state of Iowa in the United States,
private-car usage will remain the preferred means of transport by far.

The type of city will thus become the key indicator for mobility behavior, replacing the
traditional regional perspective on the mobility market. By 2030, the car market in New York
will likely have much more in common with the market in Shanghai than with that of Kansas.

❖ Once technological and regulatory issues have been resolved, up to 15

percent of new cars sold in 2030 could be fully autonomous.

Fully autonomous vehicles are unlikely to be commercially available before 2020. Meanwhile,
advanced driver-assistance systems (ADAS) will play a crucial role in preparing regulators,
consumers, and corporations for the medium-term reality of cars taking over control from
drivers.

The market introduction of ADAS has shown that the primary challenges impeding faster
market penetration are pricing, consumer understanding, and safety/security issues. Regarding
technological readiness, tech players and start-ups will likely also play an important role in the
development of autonomous vehicles. Regulation and consumer acceptance may represent
additional hurdles for autonomous vehicles. However, once these challenges are addressed,
autonomous vehicles will offer tremendous value for consumers (for example, the ability to
work while commuting, or the convenience of using social media or watching movies while
traveling).

A progressive scenario would see fully autonomous cars accounting for up to 15 percent of
passenger vehicles sold worldwide in 2030.
 ❖ Electrified vehicles are becoming viable and competitive; however, the
speed of their adoption will vary strongly at the local level.

Stricter emissions regulations, declining battery costs, enhanced charging infrastructure, and
growing consumer acceptance will propel the adoption of electrified vehicles (hybrid, plug-in,
battery electric, and fuel cell) soon. Adoption rates will hinge on the interplay between
consumer demand, influenced by total cost of ownership, and regulatory mandates, varying
across regions and localities.

By 2030, electrified vehicles could comprise 10 percent to 50 percent of new vehicle sales,
with higher adoption in densely populated cities boasting stringent emissions regulations and
consumer incentives. Conversely, rural areas may experience slower penetration due to limited
charging infrastructure and longer driving distances.

Continued advancements in battery technology will mitigate regional disparities, making

electrified vehicles increasingly competitive with conventional counterparts. Forecasts suggest
battery costs could plummet to $150 to $200 per kilowatt-hour by the next decade, spurring
market competitiveness. Despite this shift, hybrid electrics will sustain the relevance of
internal-combustion engines even beyond 2030.

❖ Within a more complex and diversified mobility-industry landscape,

incumbent players will be forced to compete simultaneously on
multiple fronts and cooperate with competitors.

The automotive industry has experienced limited disruption and consolidation compared to
sectors like telecommunications or mobile phones. Only two new players have entered the top-
15 automotive OEM list in the last 15 years, contrasting with ten in the handset industry.

A shift towards mobility as a service, coupled with new entrants, will compel traditional car
manufacturers to compete on multiple fronts. Mobility providers like Uber, tech giants such as
Apple and Google, and specialty OEMs like Tesla add complexity to the competitive
landscape. Traditional players, striving to cut costs, enhance fuel efficiency, and embrace
capital efficiency, face mounting pressure. This may lead to market repositioning, potentially
prompting consolidation or new partnerships.
Moreover, software proficiency is emerging as a critical differentiator across various domains
like ADAS/active safety and connectivity. As vehicles become more integrated into the
connected world, automakers must engage in evolving mobility ecosystems driven by
technological and consumer trends.

❖ New market entrants are expected to target initially only specific,

economically attractive segments and activities along the value chain
before potentially exploring further fields.

Divergent markets will create opportunities for new entrants, initially focusing on select
segments of the value chain and economically lucrative market niches, with potential for
expansion. While prominent names like Tesla, Google, Apple, Baidu, and Uber garner
attention, they represent just a fraction of emerging players. Start-ups and financially robust
tech firms are poised to enter the automotive arena, wielding considerable influence with
consumers and regulators. Additionally, Chinese automakers, experiencing rapid sales growth,
may wield global significance by capitalizing on industry disruptions and outpacing established
competitors.
 Moving forward: How automotive players should align
their strategic priorities
By 2030, total revenues from personal mobility will experience acceleration, yet the landscape
will be more nuanced due to shifting markets and emerging technologies. Traditional growth
patterns across markets and segments are no longer assured. Automotive OEMs must diversify
revenue sources, tapping into opportunities such as urban mobility and post-sale revenue
streams. The emergence of non-traditional revenue channels threatens the ownership of the
mobility value chain, leading to uncertainty for incumbents. To navigate this disruption,
incumbent players should adopt a comprehensive strategic approach. This entails proactive
measures to shape the industry's trajectory, encompassing four key strategies.

Prepare for uncertainty:

Success in 2030 will require automotive players to anticipate market trends sooner and to
explore new mobility business models as well as their economical and consumer viability. To
do that, they need to proactively analyze consumer preferences and be aware that there are
more similarities across city types than across regions. They also need to pay close attention to
the changing demographics in key markets, especially the increasing urbanization and the
volatility of the emerging economies, which make it difficult to predict sales volumes beyond
2020 in markets like China. A sophisticated level of scenario planning and agility is required
to identify and scale new, attractive business models.

Leverage partnerships:

As the automotive industry transitions from individual competition to collaborative interactions

and open ecosystems, OEMs, suppliers, and service providers must forge partnerships both
within and beyond their traditional boundaries. Collaborative ventures are essential for sharing
the costs associated with electric and autonomous vehicle technology, as well as developing
necessary infrastructure. Engaging governments in regulatory frameworks and architecture for
new mobility solutions is imperative. Additionally, joint efforts in consumer education
regarding the advantages and complexities of new technologies are crucial. Despite
collaboration, OEMs must retain autonomy over their value creation and success within these
emerging ecosystems.

Adapt the organization:

Given the industry's transformative shifts propelled by key trends, players must revamp internal
structures to foster heightened collaboration. Recognizing software as the linchpin for
innovation and novel business models, strategic decisions are imperative regarding the
acquisition of requisite expertise. This may entail internal talent cultivation or outsourcing to
external vendors. Adopting a two-speed R&D model becomes essential to synchronize with
short-term market trends and facilitate lifecycle product upgrades. This model must address the
prolonged lifecycle demands of hardware alongside the swift-evolving requisites of software
and business development.

Reshape the value proposition:

To safeguard their stake in the automotive profit pool, OEMs must craft tailored strategies to
differentiate their offerings, transitioning from mere "hardware providers" to comprehensive
"integrated mobility service providers." Product distinctiveness hinges on cultivating a
seamless digital end-to-end user experience, akin to the customer-centric approach of software
firms, ensuring appeal across the product lifecycle.

Considering the shift towards centrally operated fleets of shared vehicles, OEMs must fortify
their B2B sales and upscale aftermarket services catering to such enterprises. While the
industry confronts challenges, it also presents abundant opportunities. To spearhead change
and leverage the disruption ushered in by new entrants, incumbent players must prioritize
strategic decisions. The automotive sector is poised for significant growth, with its most
impactful moments yet to unfold.

Industry 4.0 in the automobile sector in India

The automotive sector, a significant contributor to India's labor-intensive industry, is
experiencing substantial technological advancement, mirroring the broader trend of technology
permeating various facets of human life. Different segments within the automotive sector have
undergone distinct forms of technological upgrades, albeit with varying degrees of penetration
across countries.

While specific technologies have influenced tasks within the automotive segment, the sector
has embraced a spectrum of advancements at various stages of deployment. This evolution
underscores the sector's dynamic nature and its responsiveness to emerging technological
trends. Moving forward, continued integration of technology is expected to reshape the
automotive landscape, driving efficiency, innovation, and competitiveness.
 Electric vehicles manufacturing and its impact on jobs
Electric vehicles (EVs) have a historical precedence, emerging as strong contenders to gasoline
automobiles in the early 20th century. However, their prominence waned due to the availability
of inexpensive fuel and advancements in gasoline engine technology. Notably, EVs distinguish
themselves from traditional vehicles primarily through two key components: lithium-ion
batteries and electric motors.

Unlike traditional vehicles utilizing lead-acid batteries, EVs rely on lithium-ion batteries, albeit
heavier, costlier, and slower to recharge and replace. Nonetheless, ongoing research within the
scientific community aims to develop lighter and more affordable battery technologies,
enhancing consumer choice, confidence, and convenience.

Understanding the evolving job landscape within the EV sector necessitates an examination of
present-day occupations. These include scientists engaged in research on electric drive
technology, manufacturing workers involved in vehicle production, and automotive
maintenance technicians responsible for repairing EVs. As the industry continues to evolve,
these occupations will likely undergo transformations, reflecting the broader shift towards
electric mobility.

Occupation in scientific research, design, and development-

The efficiency and range limitations of electric vehicle (EV) batteries, compounded by gaps in
charging infrastructure, present significant challenges to widespread adoption. Addressing
these concerns requires focused research efforts aimed at enhancing battery performance and
fuel economy. Improved battery technology would enable greater reliance on electric
propulsion, reducing dependency on fossil fuels.

This imperative for research and development in EV technology ensures continuity in job roles
within this demographic. Professionals involved in designing and developing EV technology
bridge the gap between scientific research and commercial application. This group
encompasses engineers, technicians, software developers, and industrial designers,
representing diverse disciplines such as chemical, electrical, industrial, material, and
mechanical engineering.
However, India faces a talent crunch in this specialized field due to the absence of dedicated
engineering courses. Consequently, the automotive industry relies heavily on imports for
materials and after-services. To address this challenge, auto firms are prioritizing local talent
development, particularly from premier institutes like the Indian Institutes of Technology
(IITs) and National Institutes of Technology (NITs), which offer specialized courses on
Automotive and EVs.

Recognizing the urgency, the Indian government is devising programs under the National
Electric Mobility Mission Plan (NEMMP) to train professionals in various aspects of EV
technology, including design, testing, battery manufacturing, sales, services, and infrastructure
development. These initiatives aim to cultivate a skilled workforce capable of driving India's
transition towards electric mobility.

"Plans are nothing, planning is everything." – Dwight Eishenhower

Auto firms have already started ringfencing of talent locally and focusing on training the talent
coming out of premier institutes like IITs and NITs.

Occupation in manufacturing and maintenance-

Understanding the electromobility value chain is crucial for discerning the job dynamics within
this sector. Jobs in electromobility encompass various segments, including battery and charger
manufacturing, wholesales, charger installation, operation and maintenance, and electricity
generation.

Among these, charger maintenance emerges as the most job-intensive segment, while
components like batteries, motors, and electronics in the drive train require minimal
maintenance. EVs' reliance on regenerative braking systems further reduces maintenance costs
compared to internal combustion engine vehicles, leading to a shift in job deployment.

Moreover, the manufacturing process in electromobility will undergo transformation,

necessitating changes throughout the supply chain. Traditional suppliers must adapt by shifting
from supplying traditional parts to providing battery materials and regenerative braking
systems. Concurrently, new suppliers, such as battery manufacturers and lightweight
companies, will emerge, generating employment opportunities.

Allied areas like electricity generation and grid connection will witness job creation, driven by
the increased demand for electric cars and the need to efficiently power EV chargers.
Overall, the transition to electromobility is unlikely to result in a net loss of jobs, provided
workers are equipped with the necessary skills to meet the evolving demands of the industry.
Upskilling initiatives will be essential to ensure a smooth transition and maximize the job
creation potential of the electromobility sector.

New suppliers would also emerge in the form of battery manufacturers, mining and lightweight
companies, which are net job creators.

Automobile Industry in India

India is the world’s third-largest automobile market, the largest manufacturer of three-
wheelers, passenger vehicles, and tractors, and the second-largest manufacturer of two-
wheelers.

The Indian automobile industry serves as a significant barometer of economic health and
technological progress, with the two-wheeler segment commanding volume dominance fueled
by a burgeoning middle class and youthful population. Companies' growing interest in rural
markets has further propelled sectoral growth. Concurrently, burgeoning logistics and
passenger transportation sectors are bolstering demand for commercial vehicles.

India's robust position in the global heavy vehicles market, coupled with its status as the largest
tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer,
underscores its prowess. With an annual automobile production of 22.93 million vehicles in
FY22 and strong domestic demand and export capabilities, India is a pivotal player in the global
automotive landscape.

Notably, the sector's share of the national GDP has surged from 2.77% in 1992-1993 to
approximately 7.1% presently, employing about 19 million people directly and indirectly. As
an auto exporter, India anticipates robust export growth, buoyed by government initiatives like
the Automotive Mission Plan 2026, scrappage policy, and production-linked incentive scheme.
These endeavors are poised to position India as a global leader in both the two-wheeler and
four-wheeler markets by 2022, fostering continued sectoral expansion and innovation.

Market Size
The Indian passenger car market was valued at US$ 32.70 billion in 2021, and it is expected to
reach a value of US$ 54.84 billion by 2027 while registering a CAGR of over 9% between
2022-27. The global EV market was estimated at approximately US$ 250 billion in 2021 and
by 2028, it is projected to grow by 5 times to US$ 1,318 billion.

In November 2023, the total production of passenger vehicles, three-wheelers, two-wheelers,

and quadricycles was 2.22 million units. In (April-November) 2023-24, the total production of
passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles was
15.56 million units.

In the first quarter of 2023-24, total production of passenger vehicles, commercial vehicles,
three wheelers, two wheelers, and quadricycles was 6.01 million units.

India accomplished a significant milestone, with the sale of 8,32,434 EVs in 2023-24 (till
August 2023).
The electric vehicle (EV) market is estimated to reach Rs. 50,000 crore (US$ 7.09 billion) in
India by 2025. A study by CEEW Centre for Energy Finance recognized a US$ 206 billion
opportunity for electric vehicles in India by 2030. This will necessitate a US$ 180 billion
investment in vehicle manufacturing and charging infrastructure.

According to NITI Aayog and the Rocky Mountain Institute (RMI), India's EV finance industry
is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030. A report by the India Energy
Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36%
until 2026. In addition, the projection for the EV battery market is expected to expand at a
CAGR of 30% during the same period.

Indian automotive industry is targeting to increase the export of vehicles by five times during
2016-26. In FY23, total automobile exports from India stood at 47,61,487. Indian automobile
exports of two-wheelers stood at 36,52,122 in FY23.

Evolution of Automobile Sector

GOVERNMENT INITIATIVES
The Government of India has demonstrated a strong commitment to fostering growth and
innovation within the automobile sector through a series of strategic initiatives:

1. Extension of the FAME Scheme: The FAME Scheme, extended until March 2024, aims to
promote the adoption of electric vehicles (EVs) through incentives and infrastructure
development.

2. Investment in EV Charging Infrastructure: Under the FAME-II scheme, substantial

funding has been allocated for the establishment of public fast charging stations, enhancing EV
charging infrastructure across the country.

3. Semiconductor Policy in Gujarat: The Gujarat government's semiconductor policy,

coupled with incentives for investments, underscores the focus on bolstering the semiconductor
industry, a critical component for automotive electronics.

4. Accelerated Biofuel Blending Targets: Amendments to the National Policy on Biofuels

aim to expedite the blending of ethanol and biodiesel with petrol and diesel, respectively,
fostering sustainable fuel alternatives.
5. Vehicle Safety Assessment Program: The introduction of Bharat NCAP emphasizes the
government's commitment to enhancing vehicle safety standards, ensuring consumer
protection.

6. Production-Linked Incentives (PLI) for Automobile Manufacturers: The rollout of PLI

schemes incentivizes local vehicle manufacturing, attracting investments from leading
carmakers and catalyzing industry growth.

7. Battery-Swapping Policy: The introduction of a battery-swapping policy aims to address a

range of anxiety concerns associated with EVs, promoting their widespread adoption.

8. Infrastructure Development: The expansion of India's National Highways and

inauguration of NATRAX signify efforts to bolster transportation infrastructure, supporting the
automotive sector's growth trajectory.

9. Vehicle Scrappage Policy: The Vehicle Scrappage Policy aims to phase out old vehicles in
an environmentally sustainable manner, promoting the adoption of cleaner and safer vehicles.

10. Incentives for Clean Technology Vehicles: The allocation of incentives for clean
technology vehicles underscores the government's commitment to promoting sustainable
mobility solutions.

These initiatives collectively reflect the government's proactive approach towards fostering
innovation, enhancing manufacturing competitiveness, and promoting sustainable mobility
within the Indian automobile sector.

Future Goals
The automobile industry is dependent on various factors such as the availability of skilled labor
at low cost, robust R&D centers, and low-cost steel production. The industry also provides
great investment opportunities and direct and indirect employment to skilled and unskilled
labor. The electric vehicles industry is likely to create five crore jobs by 2030.

In August 2022, the Indian government launched India’s first double-decker electric bus in
Mumbai. Looking at the long term, the government feels it is necessary to overhaul the
country’s transportation system. It is working to create an integrated electric vehicle (EV)
mobility ecosystem with a low carbon footprint and high passenger density with an emphasis
on urban transportation reform. The government's strategy and policies are intended to promote
greater adoption of electric vehicles in response to growing customer demand for cleaner
transportation options.

The Government of India expects the automobile sector to attract US$ 8-10 billion in local and
foreign investments by 2023. India could be a leader in shared mobility by 2030, providing
opportunities for electric and autonomous vehicles.

The Indian auto industry is expected to record strong growth in 2022-23, post recovering from
the effects of the COVID-19 pandemic. Electric vehicles, especially two-wheelers, are likely
to witness positive sales in 2022-23.

Future of work in Automobile Industry

Amidst a slowing down of much of the automotive industry in Europe due to the COVID-19
crisis, work stoppages could lead to a loss in production of over a million vehicles in Europe.
Germany has the largest number of employees at risk: almost 570,000 workers. Consequently,
policymakers have allowed some plants to reopen in Germany. The coronavirus pandemic has
a similarly significant impact on the wider international automotive industry.
 Real World Example in adapting the changes regarding
Industry 4.0
South Korea, the most innovative country in 2017 according to Bloomberg, is a rare example
of a country where government-driven industrial promotion of technology-intensive sectors
has been remarkably successful. The Fourth Industrial Revolution has been one of the most
discussed topics among the candidates’ debates in recent presidential elections.
The newly elected President Moon Jae-in recently proposed a set of policies to help South
Korea take full advantage of the Fourth Industrial Revolution. These policies focus on
advancing technology that is both scalable and profitable. His proposals include:
Improving coordination and knowledge exchanges by creating a Fourth Industrial Revolution
committee under the direct control of the president. This committee, supposedly consisted of
the government, experts and business, and coordinated by the Ministry of Science, ICT and
Future Planning, would spearhead policymaking on the Fourth Industrial Revolution
technologies.

Setting up an organization that supports research and development (R&D) for small ventures
with government startup assistance.

Establishing supporting infrastructure, such as a smart highway for autonomous vehicles,

which could reduce the cost of production for new inventions.
Meanwhile, the South Korean government also emphasizes the development of skills. It plans
to train and support 10,000 computer science teachers in elementary, middle, and high schools.
The Ministry of Employment and Labor recently adopted a state-issued license program to
cultivate professional human resources in the fast-developing fields of the Fourth Industrial
revolution.
South Korea’s proactive steps to support a smooth transition to an economy bolstered by new
technologies, enable new inventions to be commercialized and scaled, and invest in skills are
an excellent example for all economies grappling with the consequences – both positive and
negative – of the Fourth Industrial Revolution. All these actions, coincidentally, are very
similar to the government’s previous policies to support the country’s rapid industrialization.
Despite the socioeconomic change and despite its unique influences on our life, the way to
prepare for automation seems to be to conduct business as usual.

Industrial automation worldwide - statistics & facts

Automation, which is the use of technologies to make a process, or a system, operate
automatically without human intervention, has a long history. The first records of simple
automation date back to ancient Greece, and efforts to automate tasks in the manufacturing
industry can be traced back to the 17th century. It was in the 1940s, however, when the term
automation was first used to describe the trend of automating processes in the automotive
industry. Nowadays, humans have access to technologies like never before, allowing us to
automate different tasks in an increasing number of industries and fundamentally change them.
Reflecting the disruptive nature of industrial automation, this ongoing process has also been
described as the fourth industrial revolution (Industry 4.0).

Breaking down industrial automation

Industrial automation comprises a range of technologies that complement each other. On the
one hand, there are technologies that allow the design and manufacturing of a product with the
help of a computer and machines that take part in the manufacturing, assembling, and
packaging of the product. These are more widely called industrial robots. On the other hand,
there needs to be an infrastructure alongside solutions enabling all these devices to connect to
and communicate with each other (also called the Industrial Internet of Things). Once the
devices are connected, they can be monitored and controlled as a system, and the data the
devices retrieve can be collected and analyzed at the edge of the network or in the cloud,
allowing for improving the efficiency of production and maintenance.

Robots as an option to automate physical tasks

In an automated manufacturing facility, it is machines that carry out tasks formerly performed
by human workers. The machines can be simple, such as computer numerical control (CNC)
machines or palletizers designed to do a specific task, or more complicated, such as robots that
can be programmed to carry out different tasks. The tasks that robots do tend to be dull, dirty,
dangerous, or difficult (collectively called the 4 Ds of robotization) and thus better suited for
machines. However, not all workers appreciate the rising number of robots in workplaces.
Understandably, they fear being replaced by robots. While it is true that some low-skilled
workers will lose their jobs to robots, the introduction of robots can lead to the creation of new
jobs. Although robots’ capabilities are increasing, they still cannot do everything humans can.
The way forward might thus be combining robots’ and humans’ strengths and creating
workspaces where they can collaborate. This growth in robotic shipments and installation is
expected to grow in the coming years.
 Example of Industry 4.0 with respect to Automobile
Industry
The automotive industry is a relatively young one. It took some time to get from the first steam-
powered cars to what we would recognize as a car today. In that time, there have been several
significant advances in manufacturing technology.

Below are four of the most significant changes to impact the industry since its inception:

• Mass Production

The advent of mass production was a significant moment in the evolution of 20th-century
manufacturing. Mass production wasn’t achievable until several related technologies came to
fruition. Mass production requires precision engineering, standardization, interchangeability,
and continuity.

None of this would have been possible without the advances of the industrial revolution. But
mass production exploded across the western world during the early 20th century. Mass
production transformed numerous industries, including the automotive industry. However, it
arrived just in time for the First World War. Mass production is a big part of why that war was
so brutal.

• Spare Parts and Components

With car manufacturers producing standardized components at scale, garages and vehicle
repair businesses were able to order spare parts and use them to repair customers’ vehicles.
Over time, various innovations would make it possible for the average car owner to carry out
a broad range of repairs on their own cars.

Today, car owners are free to repair or modify their vehicles. In fact, it is easy to do so thanks
to the easy availability of new parts and components. Anyone can order new car parts online
and fit them.

• Automation

Automation has been one of the most disruptive technologies of our time. When most people
think of cars and automation today, they think of driverless vehicles. However, automation has
been impacting the vehicle manufacturing industry for decades now.

Before automation, human workers painstakingly produced every single component and put
them together themselves. The advent of automation enabled manufacturers to build
components at volume. Subsequent advances in automation technology meant that parts could
be made and then fitted together with minimal intervention from humans.

But while automation has made it easier and cheaper to produce vehicles, it has decimated
factory jobs in many areas. As the capabilities of automotive technologies have continued to
advance, car production lines have required fewer and fewer people,

• Computers

The idea of computers in our cars seemed like science fiction not too long ago. But vehicles
with built-in computers are now relatively common and becoming increasingly widespread.
Manufacturing advanced electronics is a very different game from manufacturing car parts. Car
manufacturers have had to adapt their assembly lines as a result.

The vehicle manufacturing industry is continually evolving. It is unlikely that cars in 50 years
will look like cars today.

Case Studies
• Electric vehicles driving sustainable mobility in India
• The future outlook and the export performance of the Indian Auto Industry
• Learning and Capability Acquisition: A Case Study of the Indian Automobile Industry
by Madhuri Saripalle Assistant Professor, Madras School of Economics.
 Conclusion
As the automotive sector embraces Industry 4.0 technologies, the workforce must adapt to meet
evolving job requirements. The integration of automation and artificial intelligence (AI) will
reshape job responsibilities, necessitating a shift towards specialized technical skills such as
data analysis, programming, and system integration. To empower the workforce amid this
transformation, upskilling and reskilling efforts are becoming increasingly vital.

The transition to Industry 4.0 technologies presents both challenges and opportunities for the
automotive workforce. While automation and AI may streamline processes and enhance
productivity, they also require employees to acquire new skills and knowledge. Technical
expertise in areas such as data analytics, software development, and machine learning will be
in high demand as organizations seek to leverage advanced technologies to remain competitive.

Moreover, the adoption of lean and smart manufacturing practices within the Industry 4.0
framework offers opportunities for sustainable production systems. By implementing
methodologies for cleaner production management and addressing shop floor management
challenges, organizations can improve productivity while adhering to environmental and
operational constraints. This approach not only optimizes resource utilization but also provides
solutions to common challenges encountered in shop floor management.

In conclusion, as the automotive industry continues to embrace Industry 4.0 technologies, the
workforce must undergo upskilling and reskilling to remain relevant and effective. By investing
in training and development initiatives that foster technical expertise and adaptability,
organizations can empower their employees to thrive in an increasingly digitized and
interconnected automotive landscape.

Reference
• https://www.ibef.org/
• https://www.bcg.com/
• https://www.statista.com/
• https://www.britannica.com/