The automotive industry is going through a gut-wrenching change and only recently it woke up to the need to change to electric vehicles, said Sunil Kant Munjal, Chairman, Hero Enterprise.
Munjal expressed confidence over electric vehicles leading the growth for the automotive industry. “The automotive industry is going through a gut wrenching change at this moment. The concept of electric vehicle is not new. It has been known for 100 years now. But because there was massive sunk cost within the industry, large automotive companies did not feel the need to change. This is typical of any industry,” Munjal said adding that EVs have had a good start in the country.
“These are early days for EVs. We don’t know where it will end up or which will be the final technology. But it would be a very interesting race to watch, for sure. Some initial view was that only new start-ups would win the day. Increasingly now people are saying that large companies have larger resources, and they have the ability to distribute the processes,” said Munjal, who was in Ahmedabad to deliver a lecture on ‘Impact Leadership: An Indian Story’ as part of Leadership Lecture Series organised by the Ashank Desai Centre for Leadership and Organisational Development (ADCLOD) at IIM Ahmedabad.
He said it was only when “some company” popularised electric cars, the industry woke up to the need to change.
“The awareness was always there but the need to change was not felt. That is when they turned around and then started to introspect as to how they operate and in reaching out to look at technologies that they could develop and they could get from outside,” he said.
On the market scenario during and after the Covid-19 pandemic, Munjal said the industry saw a sharp revival after Covid-led demand. After opening up of economy, the demand spurt happened across the board. “Public went with a vengeance and bought things. Some of that has tapered-off, you see in demand for two-wheelers in particular, it seems to have gone away again.”
Munjal said: “Inflation is coming back, and energy prices, especially crude oil prices, are going up. The metals and minerals, first shot up to unbelievable levels and are now easing off., The times are “unusual for the industry” as there are multiple conflicting signals impacting the actual operations of the economy. Companies are increasingly starting to realise to plan for a “black swan event”.
“We all used to say that we have a contingency plan, buffer built in but nobody had planned for this.. Nobody had imagined a situation like this. ” said Munjal