 Good evening panelists and good evening everyone in the audience and thanks for a wonderful evening today. The theme that we have today is on tech powering the auto industry. You know this is an industry which contributes to more than 7-8% of the Indian economy and much more in terms of employment that India lies on. So it's a significant sector not just from an industry perspective but also from a government perspective and a social infrastructure perspective. So tech is, we believe, a very big disruptor in the industry but you'd like to hear from people who work in this industry in a day-in-day-out place to understand how it's seen in the entire industry itself. So if I may start with you Prashant, how do you think our automotive industry is shaping the Indian automotive industry and expected to be sold in the next 5-7 years? Sure. Thank you. Thanks, Aghavan. Even before I answer this, you made a point that automotive contributes a bigger portion to India's GDP. If you look at the GDP of India, about 16% is coming from manufacturing. Out of that 49% is from automotive. And also in terms of the employment, it's almost 50% or 20 million people are employed within the automotive. With that as a background, if you see 10-15 years back, cars used to be purely mechanical. Then slowly we started adding electronics to that. With that electronics, they came in the software. But if you see last 3-4 years, I think there has been a huge increase in the content of electronics. And we all know that the connected, assisted, safe and electric mobility, I think. I think that's picking up. Today, more than 50% of the decision is based on the new earth power. That's the connected features. It's no more the engine capacity. So that's where it's going through. Again, if you see, we had a gap in the safety norms. And the government of India really worked in bringing in regulations, building the gap of safety with the European norms. I think there we are in power with that. Which is driven by regulations. But now what's right now is the consumer preferences. That's more of the connected and the assisted functions. So there's a lot of thing which is going on in terms of the connected features. And as you see, the already industry is now talking about software different week. That's the biggest challenge for automotive industry as a whole. Because still we are not able to separate. Maybe Balaji can talk a little bit more about that. We have not mastered the separation of hardware and software. That's why you see there's a huge development cost. If I talk about iPhone, they are not fantastically well. For example, today if iOS 17.2 is running, it runs on multiple hardware. iPhone 11, 12, 13, 14. That's where the software different vehicle could prove to be. So that's the next trend. And talking about electrification. I think it's a little bit of catching up for India. When we see a trend especially on the two-wheelers, three-wheelers and commercial vehicles. Still there's no business case when it comes to passenger cars. Still we have a 30% premium compared to the highs. So unless the battery prices comes down below maybe $75 per kilowatt, then you see there is a business case vis-a-vis ice engines. So the industry is catching up. And also when you talk about electric vehicles, it's 40% is electrification. Another 60% is coming from other software than the other products. So that's you which is more connected and the assistant functions. Balaji, I think just because Prashant took your name, I'm going to come to you next. If you want to weigh in on what he said and also understand that Mercedes is doing a lot of things on incorporating tech into not just your manufacturing, but also into the way customer experience is. So if you want to talk about how that's going to change in the landscape today. But trickle down into the mass segment of cars as well. So how do you see that progressing in the country? Yeah, first of all, good evening to everyone and super happy to be on the panel today. And tech differentiator, you talked about, I think Prashant already touched upon something like a software defined vehicle. And like he said, I think just the last 100 plus years it has moved from a mechanical to everything which is software defined. And like you said, yes, it is difficult to decouple the hardware, the underlying mechatronics layer that we have to the software. But at Mercedes, I would say we were right now able to bring a certain level of abstraction. We call it as our chip to cloud architecture where we are able to bring that kind of an abstraction or a layering between the software and hardware. And that allows us to say kind of continuously update the software over there. So and right now this was already shown in the reason not to show for example, and you're launching it in this year where we would have a lot of software updates that are possible. It is not only covering during the development, but also development during production, even at the customer and we are able to continuously offer software to keep things up to date. Like he mentioned about iPhone, just like how you would experience an iPhone where you get a new software update, push to your mobile device as and when a new update is available to keep that kind of continuous excitement for the customer, to keep things up to date and this is something what we are doing. But tech differentiator, if I have to look at it, you know, it's very known that Mercedes for the iconic design. But also what we want to what we have been doing is also on the technology, you know, in terms of the cutting edge technology. So if I have to talk about few things, so the technology is like cutting across so many areas. Like if I talk about the interiors, the interiors of the car has become super intelligent. You know, the car is like now a spa, for example, and I say car is like a spa. It can already figure out what is the kind of your mood and body whiteness and then we can trigger the hot stone massage for you automatically. So that's a kind of a spa like experience what you can have. And this all I would say enabled by technology or it can be like an office where you can do your team's call. For example, to have a video conference or get your office calendar scheduled or rescheduled. If it knows that you're running late for a certain destination, it can already predict that and figure out that you're going to be late for the next meeting. And it can ask the virtual assistant to already reschedule the meeting, for example. So it is like an office. It is like a theater, for example. Of course, it's kind of an immersive entertainment that you have. It's no more that you have to go to a movie theater for a 70 mm on a 70 mm screen. You get the Dolby at most experience inside the car. It's a kind of surround navigation and also the kind of coupled with that ambient lighting that you have. You can actually, according to the sound, the light would also change automatically. So this is a kind of an immersive hyper-personalized experience. Plus, on top of it, you get a virtual assistant on top, which can talk in a natural language. We are talking about all the LLMs and so on inside that to make it look like more natural, empathetic. And this is something what we are looking at from a, if I have to simply look at an in-car experience. Of course, outside it is becoming more sustainable from an electric driving point of view, autonomous driving point of view. And I think at the end of the day, if you look at it, what is the underlying thing? In this, it's the kind of a tech, right? Either it's on the electrification side, sustainability elements of it, whether it's on the material science or even discovering material through quantum computing, for example. Or on the autonomous driving with an embedded AI, all the in-car experience, what I just talked about. I would say this is a kind of a breadth what you see and the kind of a technology differentiators. What I would say this industry could bring in in terms of the customer experience. Yeah, I would take a pause there and of course, yeah, looking forward to the further conversation. Well, that's quite interesting. Coming to Nitin, the organization that you work with, there's a lot of work in the software side, especially that goes into vehicles. So I think it would be the right person to answer this. Traditionally, Indian companies have been focused on validation and testing of automotive software. But with the case taking center stage in the Indian context, how do you see this evolving? And do you see the role of Indian companies, especially on the software side, taking a much more centered role in global automotive ECUs and STACs, which are going into the vehicles, even that the proportion of electronics and software towards which are being written for vehicles are just enormous these days. Thank you so much. The way I would look at it, Raghavan, is really along two, three layers. One is if I were to roll back 10, 15 years back and coming to the point that Roshanth and Balaji have made, as long as cars were means of utility and electronics and software was not the dominant driver of experience, you do not need India as much. You looked at India as possibly a manufacturing base and not nothing more. But the moment you look at a car and a point that is moving from means of mobility to an experience by itself, which is then enabled by electronics and software, then you're talking of skills and scale required in software and electronics. I think India is a unique place right now where by virtue of the number of colleges that we have, the sheer population that we have and the base of talent that has been developed, partly by companies like us who have initiated engineering R&D, partly by, of course, companies like Continental or Mercedes-Benz who set up capitals here but to serve not just as outposts but as innovation hubs. I think we have based the overall profile of what can be done. And I think it is also true that the amount and quantum of work that is necessary to be done for the heavy lifting also means that there is not enough talent in Japan, Germany, US, all in Eastern Europe or anywhere else they look at hubs of talent. So to that extent I think India is right now at whatever you call it, demographic dividend of engineering. And the intersection of the need and automotive in terms of the heavy lifting that is needed in software and the place where we are in terms of the availability of talent and possibly the intent for innovation. I think they are the right place. Prashant, I think Continental also has a very strong software presence in the country, especially in the automotive side. So do you want to add on to this entire question on how software is, how the Indian companies are taking to the global stage? Sure. Today if you look at the software, it is about 100 million lines of code and that is going to be about 300 million lines of code in the next couple of years. Having said that, will you be measuring yourself by number of lines of code or you migrate to system, subsystem, systems and the integration part of it? So that is the challenge going forward. Number two, in terms of the opportunity while it is a challenge, the total size of automotive industry globally is about 2.75 trillion and that is projected to go up to 5.4 trillion by 2030. In the 2.5 trillion, the software portion is only just 300 billion today. That could go up to 1.5 trillion. Plus software as a service could go up to 300 billion. So that is about 1.8 trillion worth of software is waging in next 5-6 years. So that is the opportunity for Indian companies. I think as a country we have done very well when it comes to the IT services. But when it comes to automotive, as a conventional company, we are very good at spec-ing, we are very good at testing and we have a philosophy that unless it is zero defect, we don't launch a product. But the philosophy on the software side is you launch and I will fix it later. So I think both of us have come together, learned from each other. I am sure there will be much more possibilities from the perspective and talking about Fonte, we have TechCenter here which is working on most of the cutting edge technologies with the autonomous mobility or the IT performance computing or the user experience, the pillar-to-pillar displays what you see. We continue to grow and I think as I was talking about you need so many engineers, I don't think in developed countries you will be able to get so many engineers but I think that is a big opportunity for India as well as to continue growing. Sure. And coming back to you Paraji, so do you think that EV is the only platform that is going to survive in the Indian industry or do you see alternative platforms also that is going to take shape and Mercedes, I know that they have very few classes which have already come in but do you see the future being limited to EVs and traditionalize or do you see alternative fuel options also coming? I would say it's a difficult question to answer because there is no one single answer to it. I would say at some level, I would say the pace of transformation what is happening, both the customer and the market would dictate the pace of transformation. So I would say adoption of EVs will happen in terms of sustainable mobility because everybody is thinking what is good for the whole world and so on. I think that's the general mindset, shift what you see but I think the rate of adoption would determine what would be the kind of mix of technologies that would exist at any point of time and I would say from Mercedes point of view we have an ambition, we call it as ambition 2039 where we say we have said that by 2039 everything will be all electric including our supply chain because we have received commitments from our own suppliers including for example to say commit to a carbon free supply chain as well as from our entire fleet production operations are already carbon neutral since 2022 but we know that a long term it is going to be a sustainable future with electric mobility but I think until then how would that whole technology coexist and you talked about alternatives there are several alternatives like hydrogen, green hydrogen there is a lot of discussions around that but from a car perspective at least the segment that we kind of operate we are very clear that we would go with the battery electric but from a personal opinion point of view as a technology of the green hydrogen I would say it is definitely more beneficial for a heavy duty segment where it would be definitely more helpful and that is my personal view in terms of all the net technology over there Thanks Nathan if I may come back to you ADAS is a very nascent topic in India a lot of companies claim that they are going to do ADAS but if you look at where India is mostly in L1 where is there being L1 internationally we have seen L3 R&D going on in L4 and L5 but you see the Indian customer ready to pay a premium for ADAS technologies beyond L1 and if so where is that necessity coming out getting grown out of? So there are two parts here right so when you talk of ADAS there is a certain assumption that that one makes as you design systems which is that it is not just about what you put into the car but the fact that the car operates in an environment which is also a good example that you will have roads and the roads will be of a certain width and a certain size you will have curb markings, you will have lane markings and rules will be followed and I think the difficulty is not in implementing technology the difficulty is in assuring that your technology will work whether there are no rules or the infrastructure does not follow the rules I think that is the challenge that India has so we have got systems for example we have been building some amount of water in this vehicle last about 9 years 2 or 14 years when we started as far as highways went performs perfectly you get to cities works okay on certain roads and then you get to smaller roads and so on it just stops and then the other problem of ADAS is also that when you go beyond pure feature ways where you go beyond just warning and informing drivers active assistance there is a serious problem of wherever there is a human touch for example I will give you an example assume that there is a free talk and now you get the car in a self driving mode to a free talk you are completely dependent on the behaviour on the other side to decide when you start turning if a car had to be absolutely safe it would never turn in India it will never turn it will just wait there for the next 2 hours why because you always find somebody is nosing in and this means absolute clarity in terms of risk to make that turn freely so our view was that you need a passive aggressive behaviour imparted on top of your ADAS system just to make sure that you can also be a little aggressive so okay stepping back the point I'm trying to make is 1. ADAS is difficult ADAS is difficult in India simply because you expect that the infrastructure and the environment supports you as much as the technology inside the car class that is not the only driver part 2 features in India in the context that we are in large part of what you would call is ADAS elsewhere for example I have tried MSRI I have tried BMW 2 which I own now and I have learnt of most of the ADAS functions because all they do is beep and as far as I am concerned we are not practical I use park assist and so on very very specific use cases the rest what I would have assumed would have helped me is a traffic damage assist I am in very very slow crawling traffic don't worry about the road lane marking etc just keep a 2 feet distance you need very India specific unique features and hopefully there is a case for ADAS there otherwise in general I think you can most likely use it only on highways or very highly regulated roads where what rules apply elsewhere apply there so that's my simple view I believe that's very well said because all the time whenever I get into a ADAS enabled car the first thing that a driver does is switch off the ADAS systems I think the way you have to look at ADAS is assisted, automated and autonomous I think what makes sense for India is assisted functions because this is an extension of safety when you talk about automated it's hands off and to some extent eyes off but still we are not there while there is a technology exist as Nitin said it's not only the vehicle technology but the driving discipline, the road infrastructure even the sign board infrastructure many thing has to come together so from that perspective there is a good traction up to L2 maybe L2 plus in the next 3-4-5 years what you see but in order to be automated it certainly takes time I think I can just add couple of more points I think two other dimensions is also to prepare the consumer behaviour right because even if you know experienced drivers just they go and sit in an autonomous car if you travel abroad sit in a or in a Mercedes level 3 autonomous for example I think first time when you experience it you need to feel confident about that I think that is one so there is a lot of consumer customer education that is there and also the communication to the external world if you are sitting in an autonomous car how would the other participants in the traffic would know that an autonomous car is flying on the road and what kind of communication that you would have to the external world right so there are few examples like you can have a different kind of headlamp technology you can communicate in a certain different way from an exteriors of the car or from a V2X kind of a communication so this is also equally important for enabling autonomous technology when we move from as is said to automated to autonomous question nicely put it the second is the regulatory aspect so I think all the participants of the whole industry ecosystem have to come together also work together to say this is how the regulation aspects also have to support such an introduction of new technology sure Prashant if I may come to you how do you see the tier one ecosystem changing we are talking about EVs, hybrids we are talking about hydrogen happening in the industry so how do you see the tier ones coping up for such technological disruptions which are happening across the board and what is not specific to continent but how do you see the entire tier one ecosystem adapting to these changes in the market as far as electrification is concerned I talk about it it is going to take some time because it is still expensive so I will say that markets like India I think even before we moved to 100% EV I think the best is to have partial hybrid or a plug-in hybrid unfortunately government didn't support this for the last 5 years instead of moving to U06 this would have been the best with the technology but there is a lot of consumer pool when it comes to hybrid, some form of hybrid I think that is too number one number two, when it comes to connected technologies I think across the supply base there has been a good amount of experience this again from the multinational being present here and also the local tier ones in India either they have acquired the technology through partnership or they have been able to do on their board I think today we have a good base in terms of localizing this technology including optical bonding for equal this space the only thing is this requires a lot of semiconductors unfortunately India is not the location every single active passive component including resistor is imported from some other part of the world I think government has realized that and they are also working but it will take 6-7 years time because that ecosystem doesn't exist today it will take some time for us to really gear up when it comes to the semiconductors semiconductors as well so I think overall if you see there has been a good this thing and this is the only industry where we are able to net up import sources exports last year I think now the new target given by Mr. Pishioil is from 20 billion to 100 billion and there has been a lot of actions which is currently underway to reach this 20-30 billion so I think it is a good opportunity I would say for an Indian supply base for us to really level up so one last question and if I can go around the panel starting with you Nitin is AI is a big team and I am going to go out of this from the panel which is parallel running AI is a big team which is the best word in the industry as well as anyone on the road so how do you see AI disrupting if so to speak I would look at it at multiple levels so one is what goes into the product and if I assume that the car is the product what goes into the product that allows it to be lifted from a utility to an experience combined with safety and comfort, convenience and more how does it integrate into the life of the consumer like Balaji said how does it become your place of work how does it become your home away from the home I think there is a whole aspect of what electronics and software can do and a layer of AI on top that provides for that fundamental experience and the integration experience examples are bound in terms of whether it is the learning capability of the car to the path that you drive the music that you listen to the typical driving pattern the seatings settings that you have and so on I think even think of AI as being that is sitting always and absorbing from that learning and making sure that the next time around almost like this magic journey it's done it for you and I think that delivers an incremental experience the next level is how is the product made so if I move to manufacturing I think there is a very very large role for robotics and AI to bring in both efficiency and quality and I think that is going to be a critical element because as products become more complex I think manufacturing is also becoming very complex and human errors and humans in the loop I think you will have to somehow remove not simply because of cost because India is still not at the point where labour is such a big problem but you are at a place where quality is so critical that you want humans out of the loop where it is not necessary and then if I look at it further you have AI coming in the entire experience beyond just product itself and the manufacturing product sales marketing I think Mercedes-Benz is a fantastic example of how they have transformed the whole retail experience where they moved from this whole OEM to dealer stocks at the dealer's place dealer is the only point of contact to pulling it everything back so technically at this time in my view Mercedes has a view of consumer right from the point of interest till the point of maybe recycling the vehicle I think that is the journey that you are taking again all augmented by AI I am not saying AI is the only thing that makes it happen let me also be clear AI is a learner that is sitting always on the top listening and therefore learning from it and therefore making sure the next time around it is better so I will not say it is only AI but I think AI is a great augmentation to everything that is happening right now Vishan, do you want to add to that? anything talked about the customer experience with the AI maybe I can give one example how it is really positively impacting on the shop floor you know when you manufacture all this hardware and everything is getting complicated and one such example where we have implemented is in the AOS station what we call Magic AOS always when you do this in millions of pieces there is always something called false false so how do you minimize the false false because when it comes to electronics our policy is if there is a defect, no revert it goes to this plan so if there is a false fault then somebody has to inspect it in a 40x or something and there is always a possibility of error then how do you prevent these false calls in the measuring the station itself there we have used the AI so that has really yielded us fantastic results in front of reducing the false calls by more than 90 percent and Vellaji if you want to give an example I can add I think both of them if you are really covered I think if I have to just summarize some of them what they shared I think it just covers the entire spectrum of the automotive life cycle development life cycle starting from design you can now look at generative designs for example that you can use with a gen AI for example and then if you go into the products Nitin already talked about for example autonomous driving is a very typical example of with a lot of embedded AI deployed at the edge for example edge devices customer experience in cabin experience I think all of us shared some experience for example you know if you go in a Mercedes in a German Autobahn it will automatically detect the location and give you a kind of tour guide and telling historic landmarks that you can go and visit and even give more details about it in a very natural language the LLM software is actually integrated in that now there is a chat dpt integration on a head unit so I think there is an in cabin experience has gone to a next level with the help of AI to a level that whatever the customer needs it knows it knows what the customer needs when the customer needs and how it has to be delivered and that is a kind of a hyper personalized immersive customer experience what you can bring and outside the car there is a kind of a connection with the app with the kind of a selling experience or a retail experience or even if you want to schedule an appointment at the service or solve a problem with the customer care center maybe there is a lot of AI over there as well I think it's going to be all pervasive so there is no one single way and of course gen AI is off-shoot at some level has also a lot more implementation whether it's in all different touch points of the customer I think this is the technology that is going to stay and it's going to I would say scale in terms of availability in different products but what would also become more important and as the customer awareness is increasing a lot around the responsible use of AI the ethics around it the kind of regulations around it so more and more countries are coming up with the regulatory aspects around AI like EU in the European Union there is AI data AI act for example so these elements will also become important equally as the awareness is raising and then we would also then move to a newer technology I think that's a regular way of life move from an AI to a quantum AI and that is what would eventually happen I think that was very well summarized Balaji and thank you gentlemen on that note for a very very good panel and if I may add the one thing which came out across all the discussions was a car from a mechanical device is now moving into a mechatronics device plus a software device and that's going to provide challenges to the industry but also on the other side of it you look at it as a bundle of opportunities that is going to come in for the industry to take care of that note again thank you very much and it was a pleasure interacting with you bye