The automotive industry is changing, and rapidly. Since the industrial revolution, industry has seen its fair share of rapid growth. But the technology boom has taken this to a new level in the past two decades. With digitalization and automation becoming more significant, the Internet of Things is changing how consumers expect their daily needs to be met. In order to stay competitive, automotive businesses are expected to be at the forefront of these changing trends. Here are just some of the ways in which digital trends are changing the industry:
People tend to associate buying a car as an awkward encounter with a pushy car dealer. In fact, for many years, that is exactly how it was. Car companies were unable to market to consumers directly on a large scale. Instead, car dealerships placed themselves as a necessarily mediator between companies and consumers, who often did not know much about the cars they were purchasing. Consumers would come to the dealership, having only what little information was placed in newspaper ads to go off of. This made them easy to take advantage of.
The Internet has changed that dynamic entirely. While people still have to go to dealerships, they are not as gullible as before. With sites like Carfax, TrueCar, and Edmunds, consumers can do all the online research they need to do before ever entering a dealership. If they know what car they want, they can take the time to make a decision and then ask for it directly. There have even been talks of consumers someday buying cars directly off of a company’s website.
In the last couple of years, you’ve probably seen talk of self-driving cars being researched by large companies. Elon Musk, CEO of Tesla, has talked extensively about how autonomous vehicles (AV) will be integrated into the mainstream driving society in the future. The goal is to use cameras, sensors, and the Internet to pilot and navigate cars in real time, without a person manually controlling the vehicle. Although the initial testing of AV has gotten some bad press, Musk insists that it will take off in the future, reducing accidents and increasing driver efficiency. It is estimated that this will save one trillion dollars and over 900,000 people in a decade if successful. This will create opportunities for not only individuals, but companies transporting large quantities of goods as well.
Improving the Supply Chain
Transport and logistics is an important part of any business. Digitizing the supply chain at every step possible can make the buying experience much more personal for each customer. The automotive industry is taking full advantage of this trend. “Smart factories” use artificial intelligence and data gathered from customers to assess each individual’s experience. A series of algorithms allows factories to create and manage tasks according to changing demand, as well as employ robots in positions alongside people.
This creates an efficient and transparent process that the consumer can follow. Customers can engage companies directly with their concerns and receive quick feedback to their concerns. Additionally, cars that are moving across borders (as many do in the manufacturing stage) can benefit from digitalized customs documents, which were once a burdensome part of business for large international companies.
Improving Car Maintenance
It’s hard to predict the sort of maintenance a vehicle may need, especially if you have a busy schedule. Digitalization is changing this and allowing companies to do more work for their consumers. Self-diagnosing programs in each car, that relay on telematics and predictive analysis allow consumers to know what their car needs before it gets to a critical point. Industry giants are also looking at the possibility of having real time consultations with consumers so that they can perform routine maintenance from the comfort of their own homes.
Mobility as a Service (MaaS)
The shift of start-ups such as Uber and Lyft to industry giants shook the automotive industry when it first happened. The luxury of using an app to order a vehicle, having it come straight to your location, as well as the cheap rates which these companies offered quickly made them forefront players in the market. Indeed, these companies soon took over the need for consumers to purchase vehicles, making them all the more popular.
The automotive industry has decided to go along with the trend, rather than compete against it. Many companies have started partnerships with ride sharing companies, in order to benefit from the rising trend. More so, companies such as Fiat and Volkswagen have begun research into starting their own ride sharing services. If you can’t beat them, join them and then do it better than they did originally!
Data Security and Protection
Of course, with all of these trends in technology, there are legitimate risks. With the sheer amount of information being shared about people, there are dangers of this information being leaked out. Information about you, your preferences, and your finances is shared across many platforms. In fact, the automotive industry has the second biggest rate of information sharing among businesses (second only to utilities).
Cars can collect information about traffic patterns, individual drivers, where you go, how often you go there, and even your personal address. While generally, this is all done to enhance your personal experience, companies must make a rigorous effort to make sure none of this information is exposed to the wrong parties. General Motors and OnStar both suffered data hacks recently, which can shake consumer confidence and affect profit margins in the future. Many data security companies are partnering with automotive companies in order to ensure the utmost protection for consumer information. Governments and international business organizations are also coming up with guidelines about how businesses can best protect themselves and their customers.
But the fact is, despite these risks, digitalization will continue in the industry. Technology is the way of the future and the automotive industry will continue to change rapidly through the years. Consumers are likely to see more and more innovative ideas coming out of companies as they begin to adapt to an ever-changing global market.