IoT driving the Digital Transformation in Automotive Industry

The futuristic cars portrayed in the fantasy world of animation and Rohit Shetty’s movies years ago, had some thinking that the cars would fly instead of drive one day. Bygone, the evolution of auto industry has married technology with the primary mode of communication. Moreover, even before vehicles rolling off the assembly lines are equipped with technologies such as GPRS, RFID and telematics devices etc., which enable them to remain connected all the time. In fact, the demand is driven by pull from the customers. Including these technologies allows such connected vehicles to interact with devices like mobile phones, other cars, or even infrastructure elements.

A recent Industry wise Digital Maturity report published by PwC clearly proclaimed automotive industry as a Digital Champion (20%) followed by the consumer goods industry (6%). However, 46% of the automobile companies are still Digital Novice or Digital Follower. According to McKinsey & Company, cars and the Internet of Things (IoT) combined for a 55% share of net-adds in the U.S. mobile market (from Jan to Sept of 2016), while phones accounted for only 29%. The firm also reported that AT&T has added more cars than phones and tablets combined for seven straight quarters and that the company now has 10 million connected cars. All of which means that the traditional boundaries of an industry like automotive are disappearing. The customer demand of better experience and proactive actions has propelled a hard-core engineering industry to become a digital champion. Going by paradigm shift in the industry, shortly, an automobile company will be more of an IT company.

IoT for automotive is a collection and storage of data from vehicle-to-cloud that enables consumption of that data, analysis and its conversion into the actionable insights to establish a relationship with the driver, and not just with the vehicle. Connected cars are emerging as an IoT industry leader and have placed the automotive industry among the top segments for IoT adoption, at least for the next five years. A vast series of technological and other related components that offers infinite opportunities when integrated with platforms for the full IoT life cycle, that comprises of data management, analytics and decision support.

A study suggests that, 42% customers (who use social media) expects a response within 60 minutes form the OEM. Added to that, increase in the number of vehicles on road and ever mounting operational cost, making automation need of the hour. IoT and digitization can be used to improve the operational performance in the traditional manufacturing. In fact, IoT is one of the key digital transformation technologies. When one considers the foundation of operational performance, he needs to be able to verify and authenticate the movement of vehicle ownership and possession along with the parts that will go onto the vehicle. The vehicle’s life-cycle is long and it is imperative to be able to reliably track everything back.

In the customer driven economy, customer retention is directly proportional to the customer satisfaction, and customer loyalty depends on the satisfactory and personalized experience that a customer gets. Additionally, consumers have various preferences regarding the features and services they want to access. These are often based on their digital maturity and expectations. Although IoT is not a new concept in an enterprise ecosystem, but the application of technology combined with service industries will make a good effect. Today, networks are being developed around the consumer experience with how customers want to utilize mobility solutions.

In the current scenario, customers expect OEMs to be proactive with simple vehicle maintenance process. The built-in IoT sensors in smart cars captures information in real-time, prompting the driver with diagnostic information to stay ahead of maintenance, monitor oil/gas levels, engine temperature and proximity sensors for parking for improved performance. It can also talk to the owner alerting him of the anticipated mechanical failures along with directing the required support that might be needed. Concurrently, scheduling a service appointment and sending related service offers to the customer.

Connected cars are helpful to the manufacturers because they send data to the OEMs in real-time data, sharing insights on developing more accurate predictive maintenance models. Such data could also provide prompt information to engineers for quicker issue resolution and less recalls. Besides, connected vehicles are of great help to the fleet owners because they can detect driver behaviour patterns from drifting, braking and accelerations that indicate potential danger.

The auto industry would change from both, the product model perspective as well as the business model perspective. Today most automotive companies, and those in the related industry, are investing heavily to add a variety in their mobility offerings. Other technologies that auto industry will be using extensively in future are AI, Blockchain and brain-to-vehicle connectivity. Hence, the importance of developing new ecosystems in order to transform and remain competitive looks obvious. 

References:

[1]. https://hashedin.com/iot-for-auto-industry/ 

[2]. https://medium.com/iotforall/7-connected-car-trends-fueling-the-future-946b05325531

[3]. PwC report

[4]. Digital_Economy_Compass_2018

                                                                                Signing off:-Mr  R.K. Narnoli