Digital transformation is the next big disruptor in the digital automotive industry, with a long history of rapid and disruptive development. Automobile manufacturers are increasing their investments in digitization due to increased connectivity, environmental limitations, the Internet of Things, wireless solutions, and rising consumer expectations.

All areas of the automobile value chain are impacted by technology, including design, manufacture, distribution, and retail. A profusion of customer data is projected to push vehicle investment for many years to come. According to Frost & Sullivan's Future of Mobility report, IT investment would increase from $38 billion to $168 billion by 2025.

How will the automotive industry's digital transformation impact us?

Aspects of the automobile purchasing process that trace back to the early twentieth century have stayed primarily unaltered. Even though dealerships and consumers have had access to eCommerce for an extended period, most individuals continue to purchase new automobiles using the traditional method. Despite the widespread adoption of digital products such as iPads, the overall customer experience remained consistent.

In 2022, consumers of all hues are more ready than ever to purchase online for autos. An increasing number of firms will work to enhance their digital experience and increase consumer engagement through social media, mobile applications, and websites. This pattern is predicted to persist.

Is the automotive industry digital transformation necessary?

The digital revolution has simplified and improved our lives in the vehicle industry. Digital technology is incorporated into autonomous vehicles, production, maintenance, marketing, and sales. However, these new advancements are not without their downsides.

Automobile manufacturers face digitization challenges

Most automobile technical change management efforts are motivated by technological advancements and consumer expectations. The automobile industry is very competitive, as it is entwined with various other businesses. Digital manufacturing, environmental concerns, mobility as a service, and predictive computing all provide a range of benefits and drawbacks. Following are a few instances, which are not in any particular order:

Investment

Financial savings and risk management are high considerations in this challenging economic climate. Automotive businesses will emphasize supply chain visibility, sales efficiency, and customer experience as they strive for efficiency.

Companies engaged in vehicle digitalization must prioritize the best use cases with the highest return on investment. Predicting the return on investment and discovering relevant use cases for new technology will be fundamental challenges in the automobile business.

For instance, the press recently called self-driving automobiles the top disruptor. The launch of fully driverless vehicles has been delayed. According to a 2020 Deloitte poll, consumers in Germany (67%) and Japan (61%) are unlikely to spend more than $600 on self-driving vehicle technology.

Comparable is the effect of cutting-edge powertrain technology. The overwhelming majority of German and American clientele (58 percent and 54%, respectively) said they would not pay more than $600 for an alternative-fuel car. These concerns persist, although proponents of these technological advancements have a dubious client desire for technology.

Fear of change

The industry has a chance to do more to advance crucial innovative ideas. Even as the electric car range increases, there is still some fear about battery power running out. Due to the decentralized nature of the worldwide or national charging infrastructure, automobile manufacturers faceless responsibility for its maintenance. Additionally, there is controversy about whether manufacturers or the government should be responsible for charging infrastructure.

While business-to-consumer eCommerce has been a hallmark of the automotive aftermarket for decades, other facets of automotive eCommerce have only just begun to embrace digital technologies. Manufacturers are confronted with a slew of challenges. According to a poll, automobile manufacturers predict a 24 percent rise in digital expenditure over the next four years. Nonetheless, the industry's low level of digital maturity and the rapid pace at which these changes are implemented create impediments.

Customer-centricity

According to a Qualtrics survey, digital transformation is stymied by a lack of client attention. Adopting a customer-centric organizational transformation strategy is crucial for the dealer and service-level implementation of national corporate projects.

To be successful with these initiatives, the in-person dealer experience, and the digital experience must be comparable across all platforms. Brands must evaluate how their connections with customers, dealers, suppliers, and vendors may help improve the whole automotive ownership experience for the growing population of digital natives.

Examples of digital transformation in the automotive industry

The automobile industry includes numerous remarkable examples of digital transformation, spanning from product innovation to operational efficiencies to changes in how the firm communicates with its consumers directly. The following are a few examples of how automakers have embraced digital transformation:

  • Mercedes-Benz and Circular collaborated to build an environmental monitoring system for the supply chain of battery cell manufacturers.
  • Oxbotica, a company that develops software for self-driving cars, has partnered with Cisco to showcase an open roaming platform that enables autonomous fleets to transfer vast amounts of data effectively while on the road.
  • BMW's Regensburg plant achieved exceptional benefits due to an IoT infrastructure. It enables them to cut deployment time and quality control worries in half.
  • Automotive manufacturers and software developers collaborated to develop augmented reality systems that aid technicians in identifying damaged or broken components. MARTA is a method that enables technicians to work more efficiently.
  • Automobile paint and supplies have been readily available in brick-and-mortar establishments for an extended period. PBE Jobbers Warehouse, a distributor of automotive body equipment, has integrated e-commerce, customer relationship management (CRM), and enterprise resource planning (ERP) systems.

The automobile industry's evolution and its impact on customer service

Numerous facets of vehicle purchase developed during the twentieth century and have continued to expand to the current day. While both dealers and customers utilize eCommerce to offer new vehicles, the traditional purchasing procedure is more critical to both sides. Additionally, integrating digital instruments such as iPads into showrooms has improved customer service significantly.

As the world evolves in 2023, clients of all sorts will become increasingly willing to go online. Whether to consumers or businesses, you may communicate with customers via social media or an app if you sell online. This trend has the potential to accelerate in the coming years.

Autos will have a unique digital and integrated supply chain within the next two to five years. Developing an intelligent and digital supply chain is critical for all stakeholders in the business.

Further, product designers have been compelled to reconsider their designs in light of the COVID outbreak's growing problems. Production is being slowed down by issues such as a chip shortage. Remote monitoring and control have increased in popularity, as has the necessity for additional reporting tools. On the other side, automobile manufacturers are happy that the plague has gone, resulting in increased income as more people drive instead of flying.

In addition, automobile manufacturers are expected to raise their digital expenditure by up to 24 percent over several years as they contend with unprecedented competition and new product needs like electrification.

Businesses must constantly stay one step ahead of the competition to retain their clientele in today's environment. They must first assess their present and long-term technology requirements and then engage with the appropriate technology provider to assist them in accomplishing those goals. Additionally, they must enhance internal processes, retain and increase alliances, and decrease costs.

To summarize

At the time, more collaboration between vehicle solution suppliers and the automotive sector was critical. Digital transformation is required at every stage of an organization's life cycle. In the long run, the solutions outlined above will benefit all parties, including manufacturers, suppliers, employees, and customers.

Consumer items from other industries are already being influenced by IoT, AI, and other upcoming technologies in 2022, which should be surprising and exciting. These advancements also affect the automotive industry's digital transformation.