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Impact of Technology on the Automotive Industry

2018-06-27 09:40:25

Impact of Technology on the Automotive Industry

Digital Economy Handbook Infographic: Impact of Data Factories on the Automotive Industry

Nowadays cars are mainly sold or leased through distributors and dealers who collect data on customer experience and the vehicles themselves. Distributors and dealers are the main intermediaries between the car manufacturers and customers. Cars have advanced a great deal since their creation, and automotive manufacturers have adopted new technologies to improve the efficiency of vehicles of all kinds. Still, the concept of the car itself has not changed much up until now. This concept is currently undergoing some transformations, however. Currently, two main developments are underway: the growing Internet of Things (IoT) and the appearance of new mobility business models.

Growing IoT

Nowadays, the majority of our devices are connected to the internet. The same goes for cars: inbuilt software in the vehicle itself provides real-time data (user data, movement data, vehicle data, etc.) to the manufacturer. This way, manufacturers can remotely update software systems, monitor engine performance, and powertrain performance. As a consequence, this reduces the role of dealers and distributors considerably since manufacturers are now able to directly receive vehicle and customer data from the car software itself. Manufacturers will no longer need dealers and distributors to communicate with their customers and figure out their needs and wants.This will impact the margins made by distributors and dealers. It will also impact the role of repair and service entities within automobile groups, as most repairs and enhancements can be made from remote locations.

New mobility business models

The sharing economy is currently gaining popularity, and people are beginning to see the utility in not owning their own cars. Didi Chuxing, a Chinese ride-sharing giant with 20 million cars and 300 million registered users, is an excellent example of the success of new mobility business models.Once again, this diminishes the role of dealers and distributors, since the automotive market will be led by digital companies and individual car owners will become a very small percentage of the total users.

The future

These two trends, along with autonomous and electric vehicle developments, will lead to a different future for the automotive industry. Imagine a future where you are able to order a car instantaneously through your mobile device at an agreed-upon price. A fully electric and autonomous vehicle arrives within a minute from the closest shared parking. The vehicle drops you off at your desired destination and your bank account is billed automatically.Would you like a future like that? Let us know what you think in the comments below!

References: 

  1. https://www.datameer.com/blog/connected-car-big-data-automotive-industry-future/
  2. https://www.forbes.com/sites/russellflannery/2018/01/21/in-a-shared-economy-who-will-own-autos/#4fceecc02219

Impact of Technology on the Automotive Industry

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