STARTUP BUSINESS MODEL CHALLENGE – AUTOMOTIVE AND AUTO

ANCILLARY INDUSTRY
Infosys Invites Students to Share Automotive and Auto Ancillary Business Model
In the past two years, the world has seen more disruption than the last two decades combined. The COVID-19
pandemic accelerated digitalization across industries. The world woke up to the urgency of keeping global warming
below 1.5°C this century and companies and governments are acting. Amid this change, there is opportunity,
especially driven by technology. Digital has taken over the economic and social spaces of our lives.

India recently became the fourth largest economy, with aspirations for self-reliance in many sectors. India also leads
the world with innovative and out-of-the box ideas that are digitally led. To achieve the nation’s aspirations startup
culture is critical. There is vast opportunity in the next big idea, with funding and mentorship available for startups.

As a group of students, you are no stranger to this dream – you may aspire to be the next Elon Musk, Steve Jobs, or
Jeff Bezos by creating your own startup. We invite you to create a well- thought-out business plan. While ideas cannot
be limited, for this event, we are focusing on the automotive industry, which is currently the center of attention, since
it is at the cusp of massive technology transformation.
Introduction
In the ancient world, nations who could produce better steel, gunpowder and ships had an edge. Today with the
sheer range of technologies such as smart phones, AI, ML, drones, smart assistants, and personalized
e-commerce available, it’s a new and undefined world order. No doubt, technology has helped improve quality of life,
human productivity, automation, and general prosperity in our current time.

The automobile industry is currently experiencing massive technology-led transformation in every aspect – from
material selection to simulation and testing, to smart manufacturing, to connected cars and technologies for
sustainability. Ford, quite literally, initiated the automation revolution and led industrialization for every other
industry. The Ford Model T was the first mass-produced car, with a factory-line system that revolutionized factory
production. The opportunities to create products and solutions in automotive and automotive ancillary industry are
higher than ever before.

Despite already delivering on numerous fronts, technology still has much to offer in terms of business opportunities
for startups in the automotive and automotive ancillary industry.

The innovative ways in which it can be implemented to improve sustainability, passenger safety, and productivity or
save on costs for the industry is up to your creative minds to figure out.

For this auto & auto ancillary startup business model, a tangible product as an end-result is expected;
software can be one element of your offering.
Key Factors Shaping the Automotive Industry
• Industry 4.0 - Led by internet connectivity, 5G technology, and
APIs, industry 4.0 refers to the eventuality where gadgets will
soon create a network of their own, exchanging information to
provide seamless technology experiences.
• Smart manufacturing - After the Ford factory revolution, which
was all about automation of factory lines, automobile companies
are now in the midst of exploring all that digitalization has to offer.
• Supply chain - No longer is supply chain a parallel function to the
automobile industry. With technologies such as RIFD, GPS, AI,
ML, there are many opportunities for innovation as the supply
chain integrates with production lines to manage inventory,
schedule logistics and delivery and drive sales.
• Safety - Automotive ancillaries such as smart seatbelts, smart
crash detection in airbags, as well as smart braking have all
contributed to improve the safety of vehicles. With new
technologies emerging and new configurations of vehicles, safety
is a topic that always requires constant innovation.
• Environmental sustainability - The automotive industry has
been tasked with transitioning to NetZero carbon emissions, world
over. Many large automotive companies such as Mercedes-Benz,
Toyota, and Mahindra have pledged their resources into building
electric vehicles (EVs). There are also many other aspects that
lead to the decarbonisation besides EVs, such as alternate
materials, process optimization, or carbon foot printing.
• Digital experiences - Digital experiences are an exciting area for
innovators in the automobile space. The concept and
expectations of connected cars are evolving – where the entire
ownership experience is digitally-led. This includes how
customers look for vehicles online, how the dealer networks are
activated, how owners can manage their cars digitally and even
the experience of planning road trips. Of course, cyber security is
also an important concern.
• Last mile - Personal transportation for the last mile has always
been an interesting area – how do individuals who want to travel
short distances choose the best options?
Global Auto & Auto Ancillary Industry Snapshot
The automotive industry comprises a wide range of companies and organizations involved in the design, development,
manufacturing, marketing, and selling of motor vehicles.

• According to IBISWorld, the global car and automotive manufacturing market was sized at about $2.7 trillion in 2021
and expected to reach $2.8 trillion by 2022.
• Various studies show that the worldwide car sales grew to around 66.7 million units in 2021, up from 63.8 million
units in 2020.
• Major Players: Toyota, Volkswagen, Daimler AG, Honda Motor, Ford Motor Co, General Motors, BMW, and SAIC.
Industry Trends

• Players in the automobile industry are re-evaluating their long-held inventory strategy
following the just-in-time (JIT) principle, which led OEMs and Tier 1 suppliers have no
Review Hardware buffer inventory and fall back on during chip shortages. Gartner 1 predicts that by
Sourcing 2025, 50% of top 10 automotive OEMs will design their own chip and form direct
Approach working relationship with chip companies, while giving up JIT inventory management
practice.
Investments in • TX is a strategy that creates superior shared experience by combining 4 disciplines:
Total Experience Customer Experience (CX), Employee Experience (EX), User Experience (UX), and
(TX) Multi-experience (MX).

• Developments in manufacturing technologies have enabled automotive companies to

replace iron and steel alloys with a new set of materials – including aluminum,
Lightweight, fuel- magnesium, high-performance plastic, carbon fiber and other composites. According
efficient materials to US DoE2, incorporating lightweight materials in automotive design can reduce the
weight of the chassis by as much as 50%, and each 10% reduction in weight can
increase fuel efficiency by up to 6%- 8%.
Autonomous • Autonomous Vehicles: Leveraging AI, ML, and IoT technologies, automobile
Vehicles manufacturers are improving both safety and efficiently of their vehicles.
& Advanced • Advanced Driver Assist Systems: Focus on driver and passenger safety by
Driver Assist providing automated emergency braking and lane keeping assist leveraging AI, deep
Systems learning, GPS and IoT technologies.

• E-Mobility: OEMs are collaborating with tech service providers to accelerate e-

mobility adoption by developing advanced battery vehicles and fuel-cell electric
vehicles, which provides smarter mobility solutions.
Electrification
• Charging Solutions: Top tech providers are helping their automotive clients to
provide wireless battery management system and smart charging services, which
improves e-vehicle performance.
 • 3D Printed Auto Components: Top automakers are utilizing 3D, and advance
engineering technologies to develop 3D-printed tools including hand tools and automation
related components for assembling vehicles.
Manufacturing
• Digital Manufacturing: Use of integrated, computer-based system comprised of
simulation, 3D visualization, analytics, and collaboration tools to create product and
manufacturing process definitions simultaneously.

• Blockchain’s main implication for the auto industry is that it could create a trusted,
Blockchain accurate protocol for the automotive parts supply chain, helping remove counterfeit parts
from the market. This will shape the pricing strategy of carmakers and could also have a
significant impact on the car repair industry.

CREATE YOUR BUSINESS PLAN FOR THE AUTOMOTIVE AND AUTO ANCILLIARY INDUSTRY
Your Challenge

There are two parts to creating a business plan for this challenge:
Strategic Thinking
Operational Planning
You are required to create a business plan for both, Part 1 and Part 2. Your company needs to produce something
tangible related to the automobile and auto ancillary industry. It must be more than software led as a concept. So
while software can be one element of your offering, your business idea must encompass a wider proposition.

Part 1: Strategic Thinking - Build your dream. You are a garage startup
Create a business plan / business model for the startup from day 0 to next 3 yrs. Business plan should encompass
following areas.
Area Guidelines Weightage
Executive Summary A short and crisp summary that helps you sell your idea 5%
Product Strategy and Which set of products you chose to make and why – existing 25 %
Business Model Canvas players, market competition, your strength, potential for market,
(BMC) product differentiation etc.
Partnerships, industry associations, tie ups, frenemy relations,
if any, with whom and why
What assets / IP to leverage
What industry standards apply and what manufacturing
practices need to be adhered to (e.g., Industry 4.0, Automotive
Safety Regulations, Emission norms etc.)
Marketing and Branding Market channel analysis and formulation – what channels will 15 %
Strategy you avail / create to sell the products
Demand shaping, demand influencers, media strategy
(advertising, publicity etc.)
Engagement approach with academia, industry, government
bodies and trade bodies
Financial Plan and How will you raise funds 15 %
Strategy Capex, opex plans, working capital
Funds flow plan and free cash flow plan
Avenues to get funds and grants from government and industry
bodies
Other finance aspects like tax compliance, company law board
(CBL) compliance etc.
Sales Strategy Who are your customers and what type – B2B, B2C 15 %
Distribution channels
Cold and hot sales strategies
Pricing and other sales aspects
 Skills and Resourcing Culture eats strategy for breakfast. Develop a robust talent and 15 %
Strategy HR strategy to protect strategies you built in above sections.
Other aspects Including but not limited to de-risking strategies, geopolitical 10 %
environment, dumping tactics from other geographies, potential
hostile takeover.

Part 2: Operational Planning - Expand and sustain your dream. You now need to move out of your
garage and have warehouses and plants and other equipment
After 5 years, your startup has had a decent success and along with that its own set of challenges. You now
want to expand your operations in India and abroad. Please provide an operational supply chain and business
plan for the expansion considering aspects outlined in the table below. The strategies and approach can vary
based on the product(s) you decide are part of your business.
 Area Guidelines Weightage
Supply Chain Strategy Supply chain network and distribution. How many 40 %
warehouses and plants will you operate in India, (50
warehouses or just 2 or…). Will you own transport fleet and
warehousing or outsource it
How will you cater to the export market. Will you setup plants
oversees, or export finished products
Reverse logistics, product service and spares supply chain
for your products
How will you use Industry 4.0 and other industry best
practices for efficient manufacturing
Financial Plan and Strategy How will you finance the expansion 20 %
Avenues to reduce the financing cost
Other finance aspects
Sales Strategy How to be ahead of competition 15 %
Furthering market penetration
Pricing and other sales aspects
Skills and Resourcing Strategy How has your talent strategy changed in the initial 5 years. 15 %
What things would be retained and what should be changed
and why
Other aspects Including but not limited to CSR, promoting gender neutrality, 10 %
women empowerment, fostering entrepreneurship, academia
collaborations etc.

Important suggested references

1. Gartner Predicts Chip Shortages Will Drive 50% of the Top 10 Automotive OEMs to Design Their Own Chips by 2025

2. US DoE – benefits of using lightweight materials