India’s auto industry needs an antifragile makeover

In a bid to fortify India's automobile industry against future disruptions, Hisashi Takeuchi, MD & CEO of Maruti Suzuki India, urged industry leaders to adopt an "antifragile" approach during the 66th ACMA Annual Session. Acknowledging the sector's resilience in the face of semiconductor shortages, geopolitical conflicts, and supply chain uncertainties, Takeuchi emphasized that the next decade should focus on making the auto industry stronger because of disruption.

Drawing on Nassim Nicholas Taleb's concept of antifragility, Takeuchi explained that an antifragile structure gains strength from stress, as opposed to breaking under it or merely surviving. To achieve this, four key enablers were identified: deep localisation, people, collective learning, and technology.

Deep localisation was highlighted as a critical factor, with Takeuchi pointing to initiatives such as the Production Linked Incentive (PLI) scheme, the India Semiconductor Mission, and market momentum under GST 2.0 as growth drivers. However, he stressed that deep localisation requires raising standards across all tiers of component manufacturing.

Competitiveness, he noted, is not an individual company phenomenon but an ecosystem one. Supporting local suppliers through technology, quality systems, and engineering capability will be vital for long-term competitiveness.

Takeuchi also emphasized the importance of improving communication within the ecosystem to enable rapid response to disruptions. Regarding human capital, he advocated for a shift in perspective, viewing people as assets on the balance sheet rather than costs. Capability development should then be seen as an investment rather than a cost, contributing to competitive advantage.

Collective learning was identified as another crucial operational pillar. Maruti Suzuki's Digital Library initiative, which shares case studies and best practices across suppliers, was cited as an example. In terms of technology, digital tools were highlighted as enabling manufacturers to anticipate bottlenecks rather than react to them. Maruti Suzuki's use of supplier geo-mapping paired with localised weather intelligence was cited as an example.

The key takeaway was that while predicting every disruption is impossible, the objective was to identify risks early enough to take countermeasures. This antifragile approach aims to make India's auto industry stronger and more resilient in the face of future challenges.