Gen AI can boost automotive sector productivity by 32%: EY
The Indian automotive sector, which contributes 7.1% to India's GDP and employs over 19 million people, is already adopting technologies like autonomous driving, real-time analytics, and AI-driven optimisation. The EY report anticipates that GenAI will further enhance innovation and efficiency across the entire value chain.
The report, titled "How much productivity can Generative AI (GenAI) unlock in India? The AIdea of India: 2025", states the transformation in the sector will impact product development, customer engagement, autonomous driving, and sustainability, leading to operational excellence and growth.
A boost to productivity
Currently, 33% of organisations are investing in GenAI. As per the report, 57% of respondents have launched Proof of Concept (POC) initiatives, and 14% have moved these POCs into production.
“GenAI offers a tremendous opportunity for innovation across the entire automotive value chain. The industry can leverage GenAI to reshape the future of mobility but will also need to address challenges related to investment, data security concerns, regulatory compliance and workforce training," said Vinay Raghunath, Partner and Automotive Sector Leader at EY-Parthenon.
According to EY findings, customer interactions are projected to see a 37% to 39% productivity increase while production and assembly can see a boost of up to 37%. Also, automation and predictive maintenance powered by GenAI could increase productivity by 34% to 36%, enhancing cost efficiency and extending asset lifespan.
A path towards autonomous vehicles
Other functions like quality assurance, control, and marketing are also expected to benefit from AI-driven innovations. This technology paves the way for fully autonomous vehicles, potentially transforming personal and public transportation.
In manufacturing, GenAI can optimise production processes, increasing efficiency, reducing waste, and improving product quality.
Key challenges
However, to fully realise the benefits of Gen AI, addressing challenges like investment costs, data security concerns, regulatory compliance, and workforce training is of utmost importance. The technology holds the prospect of giving a fillip to India's GDP growth, as highlighted in the report.
