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Finding another gear: digital transformation in the automotive industry

For the automotive industry, the road ahead looks vastly different today than it did even a few years ago. Vehicles and the driver experience have shifted from physical to digital.

As with any industry, this change in direction has been driven by the consumer.

Every experience from shopping to house hunting has become personalised and ever more convenient, and consumers expect the same when it comes to their cars.

How companies respond to changing expectations and market trends will determine how appealing their proposition is to modern consumers and whether or not they can compete in a crowded market.

Digital transformation is essential to meeting these new demands, strengthening your position in the market, and crucially, staying ahead of your competition.

For digitisation to be a success, there are three challenges to overcome:

  • Investment: in an economic climate where cost-control and risk management are high, business owners need to focus investment in areas that deliver the most value and ROI
  • Resistance to change: the industry is dominated by large firms who are resistant to change (just look at the anxiety around electric vehicles)
  • Customer focus: as with any large-scale change that impacts how a whole industry operates, the customer needs to remain a central focus

Connectivity is key

In today’s world, connectivity is the name of the game.

Most of the activities we complete on a daily basis are turning digital, so to remain competitive, it’s vital that organisations invest in emerging digital technology.

The modern consumer demands full connectivity. They don’t want limitations placed on their experiences, and the connected car enables automotive manufacturers to keep up with changing expectations and evolving needs.

A study by US-based car comparison site, CarGurus, found that among new car buyers, 18-24 year olds take on average seven weeks to make a purchase – much longer than any other age group.

They don’t have a particular affinity to a certain car brand, so manufacturers are quickly waking up to the fact that it has become increasingly difficult to market or sell cars without connectivity features.

So – a connected vehicle is one that has Wi-Fi access? Yes, it is, but it’s so much more than that.

A connected car is one that has its own internet connection, allowing the car to share internet access and data with devices inside and outside of the car itself. In short, it helps drivers navigate roads more efficiently and safely, which explains why it’s a leading area of investment in the industry today.

Manufacturing a brighter future

Digital adoption is transforming the way vehicles perform on the road, but it’s also revolutionising how they’re made on the production line.

Traditionally, manufacturers have been hesitant to adopt digital innovation. In an industry where uptime is a critical metric, companies have been satisfied with maintaining the speed at which they build vehicles, rather than taking advantage of new technology that could help them work faster.

However, the pandemic has served as a catalyst for change within the industry.

Companies sought for better ways to operate in extenuating circumstances, with remote monitoring, control and reporting in higher demand. Although the pandemic is thankfully subsiding, it looks as if these changes are here to stay.

Increasingly, the sector is looking to leverage technologies like artificial intelligence and data and analytics to automate manual tasks, increasing productivity and efficiency, as well as reliability and accuracy.

Take a leading industrial software company like GE Digital. They partnered with a global OEM to help digitise the lengthy weld inspection process. By replacing a largely manual process to one that reads data directly from laser welders, they were able to improve the quality of inspections and significantly reduce the time it took to complete.

Digital transformation is enabling OEMs and suppliers to evaluate their existing processes and help identify areas where changes are needed to get better made vehicles to customers faster.

The big challenge for manufacturers will be how they transition when experienced workers retire and a new generation takes the wheel. Bringing this computer-savvy generation up to speed and keeping them engaged will be essential to attracting and retaining talent for the sector.

Going green with technology

As conversations around climate change continue to intensify, no industry will be insulated from a failure to move towards more sustainable and environmentally friendly technology.

In an attempt to reverse the damage caused by decades of petrol-guzzling motors, almost every major car brand on the market has a fully electric vehicle alternative in their range now.

The Society of Motor Manufacturers and Traders (SMMT) noted 190,000 battery electric cars were sold across the UK in 2021, accounting for about 11.6% of total sales and rising from 108,000 in the previous year.

For manufacturers, this trend is something to be happy about for two reasons.

Firstly, as more and more people become conscious about their impact on the environment, this buying habit is only likely to increase. Secondly, as their popularity increases and stricter emission regulations are introduced, electric vehicles will become more cost-efficient to build.

If manufacturers embrace the digital approach, they’ll also unlock another opportunity to capitalise on this trend. Electric cars generate terabytes of data each time they are driven, with some estimates suggesting 40 terabytes of data an hour from cameras and sensors (or the equivalent to an iPhone usage over a 3000 year period).

This gives manufacturers a wealth of data to analyse, helping to understand where greater efficiencies can be made during the manufacturing process and where operations can be optimised.

Customer-centricity

Digital transformation is ultimately about bringing people and processes together to make things better. So it stands to reason that the customer has to remain central to any efforts and reasoning behind digital adoption.

So – how can technology make for a better driving experience?

Predictive maintenance is just one of the ways in which car brands are seeking to improve a driver’s overall experience and make it safer. Rather than notifying drivers of faults on a purely reactive basis, AI is used to monitor sensors built into the car, identifying problems before they even occur.

AI compares data about the physical condition of a vehicle and compares this to historical data, which provides an accurate indicator for detecting faults. This feature is like having an all-seeing, all-knowing mechanic on the dashboard of every vehicle; it saves time and money spent on diagnostics and it makes cars safer to drive in the process.

Another way in which tech is transforming the driver experience is by potentially removing the driver from behind the wheel altogether.

Autonomous driving has been spoken about for a long time in the industry, but with innovations and developments, it’s becoming a reality with every passing day. Once autonomous driving has been ruled safe for widespread adoption, we can hope to see a seismic reduction in the amount of fatal crashes, as human error is a deciding factor in nearly all crashes.

But it isn’t only on the roads where customers will feel the impact of tech.

Technology is also driving vast improvements in customer care. The switch to automated customer service processes guarantees customers have access to responsive support systems when they need it most, decreasing the dependence on employees.

Revolutionising the car buying process

Car salesmen (perhaps unfairly) have always had a bit of a bad rap.

They’re characterised as being too pushy and more concerned with their sales figures than the needs of the customer.

Now, while that characterisation may be unfair, it’s something car dealerships have to battle with when selling. Customers approach the transaction naturally tense, perhaps on guard more than usual – which is understandable considering the size of the investment.

We’ve all heard of virtual viewings in the housing sector, but leading car brands are starting to digitise the car buying process too.

German car manufacturer Audi led the way with this as a response to social distancing measures.

The “Virtual Market”, created by the Japanese company Hikky, offers future car owners a far more immersive experience than visiting a dealership. From inspecting the factory floor to taking their desired car for a virtual test drive, Audi enabled their customers to do and see everything from the comfort of their living room.

Ultimately, this puts the customer at ease and enables them to make a more informed decision in a less pressured environment.

Could digital transformation help drive changes in your business?

Talk to our team of experts at 6B and discover how digital adoption can help you be more responsive to changing customer expectations and market trends, as well as giving you a noticeable competitive advantage.

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