Digitalization in Automotive Industry - FutureBridge (2022)

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Digitalization to Accelerate across Automotive Value Chain

Global uncertainties, especially price wars, and COVID-19 pandemic are resulting in new operational and technological challenges as well as potential opportunities for the automotive sector. Automotive players have been adopting digital technologies across their processes from product design, procurement, production, supply chain, all the way to sales and marketing.

Several automotive companies have steadily enhanced their digital capabilities through re-organization, creation of digitalization business units and task forces while many others are partnering, acquiring and forming joint ventures to create a more resilient business

Some examples of increasing usage of digitalization & data analytics in the automotive industry include – Digitalization in Automotive Industry - FutureBridge (3)

BMW’s plant in Munich, Germany, is increasing the use of artificial intelligence (AI) in applications to integrate into the various production processes combined with smart data analytics for enhanced efficiency in vehicle production. Artificial intelligence helps to identify recurring patterns in the production process, based on the data collected in real-time, to support continuous optimization, and to gain a clearer picture of the entire manufacturing process.

Digitalization in Automotive Industry - FutureBridge (4)Mercedes-Benz partnered with a start-up Circulor for using blockchain to track emissions of climate-relevant gases and the amount of secondary material across the supply chain of battery cell manufacturers.

Digitalization in Automotive Industry - FutureBridge (5)Cisco and Oxbotica, a global autonomous vehicle software company partnered to demonstrate an open roaming platform that can enable the seamless and secure sharing of high-volume data by autonomous fleets while on the move in a cost-effective way.

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Similarly, most industries are following the same trends with a strong focus on digital and data-driven operations to underpin successful collaboration between suppliers, OEMs & customers exchanging data and enhancing supply planning capabilities.

Serendipitously, the digital transformation of the automotive industry is also synchronized with other seismic changes like electrification, autonomous driving, and shared mobility. The legacy players, to some extent, have been shocked by the speed with which electrification became relevant, and other trends are not so different in adoption as well.

At the same time, many new players who are driving these changes come from digital technologies background and are not only driving the mobility specific change but are also very easily leading in adoption & innovative usage of digital technologies in other aspects of the business beyond the product itself.

Key Drivers and Challenges for Digitalization

Some of the key drivers for digitalization of the automotive ecosystem include –

Increasing pressure on costs and quality

Existing cost structures in the supply chain are limiting the potential cost savings. Hence, automotive manufacturers are moving to just-in-time (JIT) operations that may contain costs and improve supply chain operations. The digitalization of the supply chain will not only improve operational efficiency but also increase traceability and transparency in operations.

Further, errors in manual quality control and quality assurance along with the transfer of data among systems impact the quality of products as well as associated costs. Implementing digital solutions such as predictive maintenance, monitoring would reduce production downtime and optimize operations.

Developing products complying to environmental regulations

There is increased pressure from regulators across the globe to make transportation safe & sustainable, particularly to combat pollution, congestion, climate change, and passenger & pedestrian safety.

Many of these challenges are tackled by developing solutions that are connected and smart. For example rapid increase in usage of digital technologies like

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  • Connected, cooperative vehicles
  • Perception sensors, digital processing of sensor data, machine learning
  • Monitoring & predictive technologies for vehicle systems to ensure optimal operation

The regulators have also pushed for such initiatives slowly. Globally, there are several programs and initiatives to develop concepts like smart cities and intelligent transportation systems by digitalizing and connecting the infrastructure. There are also proposals to mandate adoption of technologies like automated emergency braking, glare-free headlamp, etc. which have a more significant digital requirement – pushing suppliers to develop their digital capabilities.

Sustainability and creating a transparent ecosystem

The ever increasing global need of industries to be more sustainable and responsible is also driving the digitalization of supply chains. A good example of this is the supply chain of cobalt for automotive batteries, where manufacturers have started using digital tools to ensure that they are not part of unsustainable and unethical mining practices. Technologies like blockchain and smart contracts will further be adopted to achieve this goal of traceability & transparency.

Product complexity and ever-changing market dynamics

Product cycles are shrinking due to shortening technology cycles and rapidly changing customer needs, requiring real-time agility and visibility across the participants in the entire value chain. New automotive features like passenger monitoring, infotainment, and several other digital & connected services have become the key value driver for automotive players.

The readiness of key technology trends and the adoption of new business models is conducive to digitalization. Some of the key trends contributing to increasing digitalization in the automotive ecosystem include –Digitalization in Automotive Industry - FutureBridge (6)

Figure 1: Megatrends shaping the digitalization of automotive value chain

Future of Digital Value Chain

The next 2 to 5 years will witness the emergence of clear digital, connected supply chain in the automotive industry. It is imperative for stakeholders across the industry to digitally operate the business by building an intelligent and digital supply chain.Digitalization in Automotive Industry - FutureBridge (7)

Figure 2: Future of the digital value chainSource: Confederation of Indian Industry

The digital value chain will break down the traditional silos across the ecosystem and enable collaboration to develop more strong and robust businesses that are better prepared to deal with unexpected circumstances. Procurement, logistics, manufacturing, and data management & analytics play a vital role in the digital value chain. In spite of several processes and paper-driven bottlenecks on the back of digital connectivity across stakeholders, warehousing flexibility and intelligence, connected visibility, planning, and ensuring adherence to accurate storage and delivery standards, and emergency response/disaster management will ensure the seamless connection and agility. Strategic tools will remove redundant operational tasks like procurement and make it integral to product development. These also enable stronger QA/QC controls, flexibility, and improved buyer-seller collaboration ecosystem. Manufacturing shop floor with a mix of networked equipment and machines working along with operators will enable real-time data-based efficiency, failure prevention, enhanced capacity management, and flexible production in-plant and across plants.Digitalization in Automotive Industry - FutureBridge (8)

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Figure 3: Key digital technologies and solutions in the automotive value chain Source: Robotics and Automation News

Supply chain, including inbound and outbound logistics, plays a crucial part in ensuring continuous production and evolution of new processes and business models in the rapidly changing automotive ecosystem. Data warehousing and intelligence which is an integral function of the supply chain, drive predictive control by focusing on data mining, and analytics. Connected visibility function of the automotive supply chain, enables seamless tracking and tracing of material across in-process and logistics, and facilitates more robust decision making across the value chain. It also allows real-time planning and continuous process, backed by real-time demand sensitivity, control over opportunity cost in the market, and greater visibility across business functions.

Conclusion

The automotive industry is facing a paradigm shift with intelligent and data-drivenoperations across the business, including, production, supply chain, sales & marketing, and after-sales services. The industry needs to accelerate digital transformation with a clear focus on integrated systems solutions, data management, and analytics to create value from data. There are several technologies, such as automation, advanced robotics, machine vision, IoT, data management & analytics that will enhance operations across the value chain.

FAQs

How Digitalization changed the automotive industry? ›

Digitalization will have a profound imprint in the future of the automotive industry too: from autonomous driving to new shared-mobility models, customized insurance contracts, remote diagnostics and repair, and predictive maintenance services, digitalization will allow new use cases and business models to develop.

How technology has changed the automotive industry? ›

Hybrid automobiles and cars that run on alternative fuels are examples of technological advancements in the automobile industry. With human-caused climate change having negative consequences for the environment, every business is shifting to more environmentally friendly technology.

What are some futuristic changes in the automotive industry? ›

  • Additive Manufacturing Advanced Analytics Advanced Robotics AI AGVs Autonomous Vehicles.
  • Big Data Biometrics Blockchain Drones Immersive Technologies Internet of Things.

How digital is changing the automotive customer experience? ›

Technology is Changing the Customer Experience

From virtual test drives, 360-degree views of the interior, or exterior walkarounds. 56% of car buyers said they could be convinced to buy a car from a 360-degree video without even having to drive the vehicle.

How do you define digital transformation? ›

The definition of digital transformation. Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.

What is the importance of automotive technology? ›

Automotive Technology is designed to give students a basic understanding of automotive construction, theory of operation, and standard industry service and repair procedures. This instruction gives them not only the knowledge to perform vehicle service but to develop the skills necessary to diagnose unit malfunctions.

What are the 5 examples of technology? ›

6 common types of technology
  • Television. Television sets transmit signals over which we can listen to and view audio and visual content. ...
  • Internet. ...
  • Cell phones. ...
  • Computers. ...
  • Circuitry. ...
  • Artificial intelligence. ...
  • Software. ...
  • Audio and visual technology.

What are the key trends of the automotive industry? ›

Digitization, increasing automation, and new business models have revolutionized other industries, and automotive will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector: diverse mobility, autonomous driving, electrification, and connectivity.

How is the automotive industry doing in 2022? ›

U.S. auto sales are forecast to finish down 17.3% year over year; Cox Automotive revises its full-year 2022 new-vehicle sales forecast to 14.4 million units, down from 15.3 million.

What will the automotive industry look like in 2025? ›

By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power. That means automakers will need to make internal combustion engines more efficient to comply with new standards.

What are future changes in automobile technology? ›

Future changes in automobile technology are likely to include: Increased fuel efficiency and new industries to support it, increased sophistication of controls and instruments, and improves safety through engineering research and development. ( All of the above.)

What is the future of automobile innovation? ›

The future of automotive innovation will hinge on four major technologies: automation, connectivity, electric power, and the shared economy. Perhaps the most obvious and fundamental change facing the auto sector is the rise of autonomous cars.

How can the car industry improve customer service? ›

You must focus on building lasting relationships with your customers by creating personalized experiences.
  1. Create customer profiles. Collect data from customers so that you can track their purchases and services and better cater to their needs.
  2. Segment your customers. ...
  3. Reward loyalty. ...
  4. Follow up.
8 Sept 2021

What is the growth prospect of the online car buying industry? ›

Online Car Buying Market Statistics 2021-2030

The global online car buying market was valued at $237.93 billion in 2020, and is projected to reach $722.79 billion by 2030, registering a CAGR of 12.2% from 2021 to 2030. The COVID-19 outbreak severely impacted the automotive sector on a global level.

What features in the modern automobile are customer driven? ›

Question: What features in the modern automobile are customer driven? Answer: The features that exist in today's vehicles are all customer focuses for the most part. Everything from air condition/heated seats, park assist, sensors, navigation.

What are the three 3 main components of digital transformation? ›

Executives are digitally transforming three key areas of their enterprises: customer experience, operational processes and business models. And each of these three pillars has three different elements that are changing. These nine elements form a set of building blocks for digital transformation.

What are the four types of digital transformation? ›

There are four different types of digital transformation, including process transformation, business model transformation, domain transformation, and cultural/organizational transformation.

What is advanced automotive technology? ›

PROGRAM DESCRIPTION. This certificate or degree program prepares students for entry-level employment as automotive service and repair technicians. Basic automotive maintenance and service operations are stressed to allow students to be immediately productive on the job.

What is introduction to automotive technology? ›

Introduction to Automotive Technology trains students to diagnose, adjust, repair, or overhaul automotive vehicles. This course follows the National Automotive Technicians Education Foundation (NATEF) Maintenance and Light Repair (MLR) standards.

What is automotive service technology? ›

Today, automotive technicians use computers and scanners to help diagnose problems in cars. This discipline is taught by ASE (Automotive Service Excellence) certified instructors and allows students who complete specific coursework to be qualified for employment or additional specialized training.

What is the new technology in 2022? ›

In 2022, AI will become even more ubiquitous with natural language processing and machine learning advances. This will enable AI to understand us better and carry out more complex tasks. 5G is the next generation of mobile network technology, which is set to transform how we live and work.

What technologies are currently used in vehicles? ›

Modern Technology in the Automotive Industry
  • Automatic High Beam Control. ...
  • Backup Cameras. ...
  • Predictive technology. ...
  • Self-driving vehicles. ...
  • GPS Car Track. ...
  • Cruise control. ...
  • Automatic lift-gates. ...
  • Biometric seat.
5 Dec 2019

Which is the most technologically advanced car? ›

All of this technology makes the Tesla Model S arguably the most advanced car on the road today. It is certainly the most advanced electric car, and also the most advanced semi-autonomous driving cars so far.

What are digital technology tools? ›

Digital technologies are electronic tools, systems, devices and resources that generate, store or process data. Well known examples include social media, online games, multimedia and mobile phones.

What are examples of digital services? ›

Examples of digital services include games, e-books, cloud-based software, websites, and streaming music.

Why is digital technology important? ›

Digital technologies have advanced more rapidly than any innovation in our history – reaching around 50 per cent of the developing world's population in only two decades and transforming societies. By enhancing connectivity, financial inclusion, access to trade and public services, technology can be a great equaliser.

What will the automotive industry look like in 2030? ›

Overall global car sales will continue to grow, but the annual growth rate is expected to drop from the 3.6 percent of the last five years to ~2 percent annually by 2030. This drop will be largely driven by macroeconomic factors and the rise of new mobility services such as car sharing and e-hailing.

How can the automotive industry be improved? ›

Quality Management Tips For the Automotive Industry
  1. Create a Culture of Quality. ...
  2. Work Closely With Partner Suppliers. ...
  3. Leverage Manufacturing Intelligence. ...
  4. Adopt a Technology-Infused Supply Chain. ...
  5. Demand More Than An Inspection Report.
7 Mar 2022

What can we expect to see in the automotive industry in 2030? ›

By 2030, the automotive ecosystem can expect to see major market consolidations and partnerships. With OEMs shifting their focus to electric and autonomous cars, suppliers and dealers will likely follow a similar path.

What is the biggest challenge facing the auto industry? ›

#1 Manufacturing shutdowns

Governments the world over enforced health and safety regulations, making manufacturing shutdowns one of the most significant challenges of the automotive market.

What is going to happen to the automotive industry? ›

Ongoing product shortages

The industry lost around $210 billion in revenue in 2021, according to AlixPartners, a business management consultancy. While chip supplies are loosening up, they're far from back to normal, and production cut be hurt well into 2022.

How big is the automotive industry 2022? ›

The market size, measured by revenue, of the Car & Automobile Manufacturing industry is $100.9bn in 2022.

What are the key factors affecting the automotive industry? ›

Factors affecting the Automotive Industry (PEST Analysis)
  • 1) Political factors. ...
  • 2) Economic factors. ...
  • 3) Social factors. ...
  • 4) Technological factors. ...
  • 1) Strengths. ...
  • 2) Weaknesses. ...
  • 3) Opportunities. ...
  • 4) Threats.
10 Aug 2021

Why automotive industry is growing? ›

Market Research Future's Review on Automotive Industry

Rising economic growth, alongside the production and sale of self-powered vehicles worldwide, influences market revenues. Moreover, the rising production of passenger cars, trucks, buses, and other commercial vehicles drives the growth of the market.

Why is the automotive industry declining? ›

Consumer concerns about inflation – including higher gas and vehicle prices – likely played a role in the quarter's projected sales decline, which includes an expected drop of at least 24% in March. But the biggest factor is the thin supply of new vehicles amid a global shortage of semiconductor chips.

What is an example of a digital transformation trend in the automotive industry? ›

Automotive manufacturers have been integrating digital technology into all aspects of their operations, from product design through procurement, production, and supply chain management, as well as sales and marketing. A fantastic example is using digital technology to improve online customer support.

What is the difference between automotive and automobile? ›

Both terms, automobile and automotive are related to vehicle industry. Automobile is a noun that usually refers to a four-wheeled automotive vehicle designed for passenger transportation whereas automotive is an adjective relating to motor vehicles. This is the main difference between automobile and automotive.

What is the future of electric vehicles? ›

The global market for electric vehicles (EVs) is growing continuously at a compounded annualised growth rate (CAGR) of 21.7 per cent. It is expected to grow from 8.1 million units to 39.21 million units by 2030. This exponential growth is being driven by various factors, including concerns for pollution.

What can we expect from the future cars? ›

To conclude, the car of the future, built according to a new model, will be electric, autonomous and connected. It will bring a number of benefits to society: less pollution, more safety, more free time and services. And at the end of it all?

What is the most significant trend affecting the automotive industry at the moment? ›

Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs). Searches for “electric vehicles” are up by 257% over the past five years. The IEA estimates that global EV sales exceeded 3 million units in 2020. That's over 4% of global vehicle sales.

What are the applications of nanotechnology in the field of automobile industry? ›

Nanotechnology Applications in the Automotive Industry. Nanotechnology can be incorporated in various automobile parts such as paint, batteries, fuel cells, tires, mirrors, and windows. The introduction of nanotechnologies enhances the performance of existing technologies for the automobile industry.

How big is the automotive industry 2021? ›

Revenue - automotive manufacturing industry worldwide 2019-2022. The global automotive manufacturing market was worth about 2.86 trillion U.S. dollars in 2021. The market is projected to grow to some 2.95 trillion U.S. dollars in 2022. This growth is a slow recovery, still under the industry's 2019 market size.

What does digitization mean in business? ›

Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.

What is the automotive industry? ›

The automotive industry includes industries associated with the production, wholesaling, retailing, and maintenance of motor vehicles.

How is physics used in automotive? ›

Today, armed with knowledge of physics, automotive engineers can design cars to best reduce drag, increase horsepower output, increase acceleration and safety. This means lower ownership costs, and better performance for the consumer.

Which of the following is European OEM people's car? ›

The European automotive sector has ascended to the top of the global industry.
...
The Mercedes-Benz was the best-selling European car brand in the United States.
RankCompanyCountry
#1ToyotaJapan
#2VolkswagenGermany
#3DaimlerGermany
#4Ford MotorUnited States
1 more row

What are examples of digitalization? ›

Digitization refers to converting analog data sources into digital files. Some examples include creating spreadsheets based on the data from ink-on-paper records, scanning paper documents or photographs and saving them in PDF format on a company's drive.

What are the benefits of digitalization? ›

Benefits of digitisation
  • Access. ...
  • Generating income. ...
  • Brand. ...
  • Searchability. ...
  • Preservation. ...
  • Interaction. ...
  • Integration. ...
  • Disaster recovery.

What is the future of car technology? ›

When it comes to future car design, technology is the biggest driver behind new car models. Major trends show that cars of the future will be electric, autonomous, connected and sleek. In just a few years' time, vehicles on the road could look nothing like they do today.

How can the automotive industry be improved? ›

6 Steps to Continuous Improvement in Automotive Manufacturing
  1. Product Consistency. ...
  2. Compliance With Standards. ...
  3. Process Efficiency. ...
  4. Maximum Resource Utilization. ...
  5. Adopt a Team Mindset. ...
  6. Define Value from the Customer's Point of View. ...
  7. Develop a Common Understanding of the Cost of Quality. ...
  8. Solve Problems Completely.
28 Dec 2020

What is an automotive technology? ›

Simply put, automotive technology refers to the study of self-propelled vehicles or machines. That applies to standard automobiles, sports cars, tractor-trailers, marine vehicles and more.

What science is used in automotive engineering? ›

While it is closely related to mechanical engineering because it deals with moving parts, motion, and the forces on those parts, automotive engineering also uses concepts from electrical engineering and materials science.

How Newton's laws are used when designing cars? ›

Newton's second law states that force equals the mass multiplied by acceleration. So, in an automobile accident, the force of the automobile and its occupants decreases if the time required by the vehicle to stop increases. Basically, crumple zones work according to Newton's two laws.

What is the difference between speed and velocity? ›

Speed is the time rate at which an object is moving along a path, while velocity is the rate and direction of an object's movement. Put another way, speed is a scalar value, while velocity is a vector.

Why is the German car industry so successful? ›

Precision Engineering. German cars are built by highly professional engineers that choose a vocational track before they even complete their equivalent of high school. Manufacturing is a respected field in the country, and the people take pride in the craftsmanship their car brands have built a reputation for.

Who is the biggest car manufacturer in Europe? ›

Volkswagen Group has long been the largest automaker in Europe. As of 2007 it edged out Ford to rank third in the world after General Motors and Toyota. It is also the parent group of Audi, Porsche, SEAT, Škoda, Bugatti, Lamborghini and Bentley.

Which country produces the best cars? ›

Best car-producing countries
RankCountryRating
1Czech Republic76.4%
2Sweden74.1%
3Germany73.5%
4Spain72.2%
7 more rows
28 Mar 2022

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