AI is not just for OEMs: How startups are democratising auto intelligence

AI is reshaping industries across markets in ways that once felt unimaginable. The automotive sector is no exception. What was earlier considered advanced technology reserved for Original Equipment Manufacturers (OEMs) with large R&D budgets is now influencing day-to-day operations at the ground level.

Garages, local workshops, independent mechanics, fleet operators, and mobility businesses in Tier-II and Tier-III regions are increasingly adopting AI-enabled tools that were once far beyond their reach.

Just a few years ago, many smaller workshops across India relied on experience and intuition but had limited access to modern diagnostics. A mechanic in Jaipur could identify a carburettor issue instantly by sound, yet would hesitate when a sensor-heavy vehicle arrived. The challenge was never capability. It was access to diagnostic ecosystems locked behind costly OEM authorisations, proprietary scanners, and restrictive software licences.

That landscape has transformed rapidly. Across the country, plug-and-play OBD scanners and AI-powered devices developed by emerging startups are becoming part of routine checks. It is now common for these tools to flag hidden issues that manual inspection would never reveal, often identifying failures that would have caused a breakdown only days later. These stories are no longer rare incidents. They are becoming the new normal.

This shift highlights a fundamental change. Advanced diagnostics and AI-driven intelligence are no longer confined to automotive giants. They are reaching small garages, Tier II and Tier III towns, and fleet operators who form the backbone of India’s mobility ecosystem.

For decades, vehicle intelligence lived inside OEM systems and remained inaccessible to most independent players. Startups have changed this dynamic by accelerating innovation, reducing hardware dependency, and moving automotive intelligence from vehicle-integrated systems to cloud-enabled platforms. AI no longer requires specialised equipment. It now operates through mobile apps, affordable plug-and-play devices, and accessible cloud services.

As a result, the automotive industry is experiencing one of the most inclusive technological shifts in its history, with AI becoming a practical tool for every segment of the mobility value chain. And this shift can now be seen through multiple applications across the industry.

Predictive maintenance becomes universal

Unplanned downtime is a major contributor to revenue loss for fleet operators in India. According to insights highlighted by NITI Aayog, a significant portion of this downtime comes from preventable issues rather than unavoidable failures. Historically, predictive maintenance relied on expensive OEM telematics tied to proprietary hardware, leaving independent fleets with limited options. Startups have changed this reality.

Affordable plug-and-play OBD devices, paired with cloud AI, can now interpret live engine data in real time. Early signs of overheating, alternator imbalance, injector inconsistencies, and coolant fluctuations are detectable long before symptoms appear. This allows fleet operators in cities like Indore, Surat, and Hubballi to shift from reactive repairs to proactive planning, significantly reducing breakdowns and revenue loss.

Fleet intelligence at a fraction of historical cost

India has over 5 million commercial vehicles, yet many still operate without performance visibility. Legacy telematics solutions were costly, limiting adoption mostly to large fleets. The emergence of startup-led telematics has removed this barrier.

With low-cost devices installed in each vehicle, operators can access real-time dashboards showing route performance, idling duration, fuel deviations, driver behaviour, and overall fleet health. What used to require expensive enterprise systems is now accessible through a smartphone, enabling even Tier II and Tier III fleets to operate with far greater efficiency and transparency.

Usage-based and data-driven insurance

The insurance sector is also benefiting from mobility AI. IRDAI reports highlight that a substantial share of motor insurance claims often stems from issues that could be prevented with better vehicle monitoring. AI-driven diagnostics and telematics data enable insurers to validate claims faster, identify root causes more accurately, and assess vehicle condition with greater objectivity.

Premium models are gradually shifting from flat rates to usage- and behaviour-based pricing. This improves fairness for customers while helping insurers prioritise risk prevention rather than reactive claim settlement.

The rise of AI adoption in Tier II and Tier III in India

AI adoption in mobility is growing fastest in Tier II and Tier III cities where downtime has immediate financial impact. Fleet operators are using AI tools to predict failures, schedule maintenance intelligently, and manage large fleets with minimal manual intervention. Used vehicle dealers rely on AI-led inspection tools for transparent pricing. Independent garages use cloud-based diagnostic systems to service newer vehicles without needing OEM-specific tools.

This shift signifies an inclusion-driven transformation, bringing intelligence to every layer of India’s mobility value chain.

The Next Evolution: Intelligent garage management

With vehicle density increasing across India, garages are transforming their internal operations as well. Many have begun deploying advanced garage management software to streamline workflow. Some startups are now building systems that track vehicle movement inside the workshop without any manual entry. Tools like these will significantly improve transparency, customer experience, and daily efficiency for garages of all sizes.

The Future: Self-optimising mobility

If the first phase of mobility intelligence belonged to OEMs and the second phase to startups, the next phase will belong to the entire ecosystem. Technicians will diagnose faster, fleets will run smarter, insurers will assess risk more accurately, and drivers will benefit from intelligence running quietly in the background.

The future of mobility in India is not defined only by autonomous vehicles. It is defined by accessible, intelligent, self-optimising systems that empower users at every level.

India’s diverse vehicle base and rapidly evolving digital infrastructure position the country to lead this democratised revolution in mobility intelligence.

(Vimal Singh is the Founder and CEO of ReadyAssist)