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Digitalization in the Automotive Industry
The digital automotive industry is facing a disruptive disruption due to digital transformation. Connectivity, environmental restrictions, IoT, wireless solutions, and consumer expectations are driving automobile manufacturers' investments in digitization.
FREMONT, CA: The digital automotive industry has a long history of rapid and disruptive development; digital transformation is the next major disruptor. Automobile manufacturers are increasing their digitization investments due to increased connectivity, environmental constraints, the Internet of Things, wireless solutions, and escalating consumer expectations.
Technology impacts the entire automotive value chain, including design, manufacturing, distribution, and retail. For many years, vehicle investment has been driven by the abundance of customer data. According to the Future of Mobility report by Frost & Sullivan, IT investment will increase from $38 billion to $168 billion by 2025.
How will the digital transformation of the automotive industry impact people?
Aspects of the automobile purchase procedure that date back to the beginning of the twentieth century have remained unchanged. Although dealerships and consumers have had access to eCommerce for a considerable time, most individuals continue to purchase new vehicles conventionally. The overall customer experience remained consistent despite the widespread adoption of digital products like iPads.
Today consumers of all races are more willing than ever to buy automobiles online. A growing number of companies will strive to improve their digital experience and increase consumer engagement through social media, mobile applications, and websites. This pattern continues.
Is the digital transformation of the automotive industry necessary?
The digital revolution has simplified and improved lives in the automobile industry. The use of digital technology in the production, maintenance, marketing, and sales of autonomous vehicles integrates the technology. However, these new developments are not devoid of disadvantages.
Digitization obstacles confront automobile manufacturers
Most of the automobile industry's technical change management efforts are motivated by technological advances and consumer expectations. The automobile industry is highly competitive due to its interconnectedness with numerous other industries. Digital manufacturing, environmental concerns, mobility as a service, and predictive computing have advantages and disadvantages. Here are a few examples:
In this challenging economic climate, financial savings and risk management are of utmost importance. As they strive for efficiency, automotive companies prioritize supply chain visibility, sales efficiency, and customer experience.
Companies engaged in vehicle digitalization must prioritize the most profitable use cases. Predicting the return on investment and identifying applicable use cases for new technology will be fundamental obstacles for the automobile industry.
For example, self-driving cars have recently been referred to by the media as the greatest disruptor. There has been a delay in the introduction of fully autonomous vehicles. A 2020 Deloitte survey reveals that consumers in Germany (67 percent) and Japan (61 percent) are unlikely to invest more than $600 in autonomous vehicle technology.
The impact of cutting-edge powertrain technology is comparable. Most German and American customers (58 percent and 54 percent, respectively) stated that they would not pay more than $600 for an alternative-fuel vehicle. These concerns persist, even though proponents of these technological advancements have a dubious understanding of client demand for technology.
Aversion to change
There is an opportunity for the industry to do more to advance crucial innovative ideas. Even as the range of electric vehicles increases, there is still concern that the battery power will run out. Due to the decentralized nature of the global or national charging infrastructure, automakers bear no direct responsibility for their upkeep. Furthermore, whether manufacturers or the government should be responsible for charging infrastructure is debatable.
While business-to-consumer eCommerce has been a defining characteristic of the automotive aftermarket for decades, other aspects of automotive eCommerce have only recently begun to adopt digital technologies. There are many obstacles facing manufacturers today. According to a survey, automobile manufacturers anticipate a 24 percent increase in digital expenditures over the next four years. However, the industry's low level of digital maturity and the rapid implementation of these changes create obstacles.