How tech is transforming the Indian car market

Six months ago, Honda launched a new iteration of its least expensive car in India: the Amaze. While it was a seemingly regular refresh of a mainstream car, the Amaze brought features not seen before in its segment: lane-keep assistance, adaptive cruise control, collision avoidance and road departure warning for as low as ₹12 lakh on-road.

Honda isn’t the only one. In 2021, homegrown carmaker Mahindra Auto launched its premium sports utility vehicle, the XUV700. It saw massive demand, contributing to Mahindra becoming India’s second biggest carmaker by sales last month. Its key hook: technology.The car, priced ₹9 lakh onward, brought features that were so far largely reserved for luxury cars priced at around ₹50 lakh and above: remote car start control, remote air conditioning, live tracking and geofencing through a mobile app, autonomous braking and related advanced driver assistance system (Adas) features, a ‘Smart Pilot’ semi-autonomous driving mode, a 360-degree parking camera, and more.

These features, along with the likes of tyre pressure monitoring, cameras on side mirrors, auto-dimming electronic mirrors, are becoming standard across cars priced at around ₹15 lakh. A decade ago, most cars in this segment showcased Apple CarPlay and Android Auto as their prime tech offerings, alongside branded speaker set-ups. The technology itself is on a steady evolution trajectory—basic Adas features are found in an increasing number of cars, while luxury carmakers are finding ways to use tech in indulgent ways.

Theatres & intelligent seats

“I no longer press buttons or scroll through toggles, I simply speak with my car. For instance, I can tell my car to adjust the air conditioning if I’m feeling hot,” Vikram Pawah, president, says BMW India. Pawah’s proposition with BMW is of tech that provides lifestyle enhancement. The BMW i7, the company’s flagship offering, features an 8K ‘Theatre Screen’—a 31-inch fold-out display that can turn the car into a private theatre. While Adas features have continued to evolve alongside, the company has begun standardizing various technologies.

“Basic Adas features, for us, are a part of the standard offering even in our entry-level models—we view this as a necessity that customers demand in terms of safety. Even the curved display on the dashboard is a necessity to ensure that all the information is within the eye-level of the driver, minimizing the need for distractions,” Pawah says.

Santosh Iyer, managing director and chief executive of Mercedes-Benz India, concurs. “We’re now in the process of integrating a new operating system, MB.OS, which will integrate generative artificial intelligence—where the voice assistant in the car will learn from an owner’s usage habits. For instance, a Mercedes-Benz car can automatically learn how a seat is configured based on daily usage trends, and adjust it based on the time of the day,” Iyer said.

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Mercedes-Benz, in its flagship offering, the EQS SUV, offers a 56-inch ‘Hyperscreen’ that integrates all information across three separate display panels. While one caters to the driver and shows the mechanical essentials of the car, there is also a 17.7-inch infotainment display, and a third 12.3-inch display for the co-passenger riding up front.

Both Pawah and Iyer believe that none of them take anything away from the primary features of their cars, either. “Our focus remains on the driving experience, but the technology features ramp-up what we have on offer to showcase features that were never seen in cars before,” Pawah said.

Connected cars

In the luxury segment, connected cars—vehicles with integrated connectivity that can relay information on weather and live traffic through a central server—have become the norm. “We’re using this today to work with governments and public bodies to try and improve road safety conditions, as well as roads themselves. This is a key part of our offering, and while it does add to the cost significantly in terms of engineering and integration of chips, it’s a long-term benefit. Customers buying a car today, for instance, can receive software updates to their in-car system for eight or more years down the line—hence giving them incremental value over time,” says Iyer. BMW, too, offers connected cars as a platform—in the long run, this data can be harvested for autonomous driving use cases.

Buying decisions

Car buyers, too, feel that tech features give them more bang for the buck. Noida-based 44-year-old IT professional, Anuraag K, says that he bought the new Honda City over a similar offering from Skoda because an equivalent variant of the car gave him access to Apple CarPlay wirelessly. “It’s a tiny thing for many people, but for me, it made a big difference—not having to keep my phone tethered to a wire,” he said. Meanwhile, Aniket Hazra, a 28-year-old consultancy professional, says that he is considering the Mahindra XUV700 over SUV offerings from other brands “because Mahindra’s tech-laden aesthetics simply feel more premium—even closer to a Tesla.”

Consultants believe that technology is an imperative, but in terms of buying decisions, there could be diminishing room for differentiation. “While there are some early movers, every carmaker is integrating most forms of Adas features and software-driven experiences to remain competitive. Buyers today are more tempted with tech features that are visible or can be experienced than what’s under the hood. This is a clear way in which tech is impacting car-buying decisions,” says Som Kapoor, automotive leader for EY India.

In the long run, the differentiating aspect of technology will be agnostic of segments and will depend on how tactically useful the technology is. “People today expect that if their phones can do a certain task, why can’t their car? The key factor to note here is to analyze ‘features leading to benefits’—the more value-added features a carmaker can integrate, the more will it lure in users to choose one car over another,” says Kapoor .

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