The auto industry is changing gears. Global disruption, technological advancements, and evolving consumer habits have reshaped the automotive industry at a variety of levels at the same time.
The old-fashioned business model of manufacturing, designing, selling, servicing, and financing vehicles is still in place.
But at the same the auto industry is racing towards an entirely new future, driven by the need for sustainability and evolving consumer habits, which include electronic vehicles and connected automobiles the sharing of mobility vehicles, on-board sensors, business models that are new and constant connectivity.
Learning From Continuous Disruption
The initial lockdowns for pandemics in the early days of the pandemic, the automobile industry was severely hit, when supply chains across the globe came to a standstill, factories and dealers were temporarily shut down, people stayed at home, or drove less.
Despite the initial slowdown, experts from the industry believe that the pandemic has actually led to accelerated growth of digitalization in the automobile sector.
It’s not the first, nor even the final, disruption that the auto industry has faced. Many believe that the business, specifically the auto industry, gained a lot from the economic challenges in the past.
The lessons gained from the recession during 2008-2009 made sure that automotive manufacturers were more prepared to withstand the storm and more able to bounce back.
Automotive manufacturers are struggling with the shortage of semiconductor chips, which are affecting the production of vehicles.
The constant interruptions to production and distribution chains has increased the speed of several fundamental technological and business trends in the automobile industry.
Disrupt or be Disrupted
The accessibility and acceptance of cutting-edge technology are driving a majority of the fundamental trends in the automotive industry.
Connected cars, sensors, electrification, and new business models (including mobility-as-a-service) all take advantage of advanced technology solutions. Industry experts agree that this is where the automotive industry should be focusing in the coming years.
The entire business, from automakers to suppliers, must maintain profitability in existing operations while also constructing the capacity needed to deal with these innovative technologies.
Businesses must strike the right balance between sustaining the business’s profitability and stability as well as simultaneously leading the way to disrupt their business model.
An Innovative Mindset is Key
While many carmakers and suppliers took lessons from the past to be able to withstand the recent problems and to make current operations more efficient, certain industry experts say flexibility and innovation is essential in addressing the specific challenges that lie ahead for the future of the automobile industry.
In an earlier online webinar, Joachim Skarpil, the Head of Automotive Suppliers at Capgemini, explained, “The future innovations will be made possible by software components. Every automotive company must come up with its own unique solutions. Thus new products, or products that offer new services or new business models must be designed. In the future, automotive manufacturers will need to be more flexible and quicker than ever before.”
The Future of Mobility
What does what the coming future for mobility appear as it is in real life? There is such a huge amount of cooperation and ingenuity within this field that e-mobility innovation is currently in progress.
Here are some examples:
- Autos that can be self-aware and can be connected to a platform that allows for the development of new business models.
- Cars that have hundreds of internet-connected engine controllers (ECUs) as well as sensors that offer information and insight.
- The possibility of combining the sale of vehicles with subscription-based services for parking electric car (EV) charging rideshare, car share services.
- Insurance based on algorithms based upon information from connected vehicles.
- Fleet services, currently at an all-time high will continue to increase and will expand into charge-point operations as more fleets are electrified.
Strategies for Success
Five key strategic goals that auto companies employ to manage the necessity of running an efficient business and also develop innovative business models and solutions:
- Customer-centricity Through the entire pandemic of the virus, numerous automobile dealers and manufacturers have discovered innovative ways to connect directly with customers. And they are planning to extend this interaction with customers.
- Mobile services Customers’ loyalty to brands will slowly shift from brand dealerships and brands to integrated, convenient services, as well as mobility choices. Innovative business models such as pay-per-use and subscription-based mobile is the best way to go.
- Connected automobiles: Companies must design and build vehicles that meet the evolving mobility requirements by becoming smarter and connected.
- Smart manufacturing and digital supply chains Manufacturing and supply chain networks must be more durable, fully modular and flexible. How you interact with suppliers will be vital to your future success.
- Connecting to a rapidly changing workforce, the Skills that auto companies require are rapidly changing, which means that they must transform the way they hire, keep, and re-skill and retire employees. The traditional skillsets required by automotive firms that were primarily mechanically driven are evolving and will require computer skills across the entire automotive value chain.