The automotive industry is changing gears. The auto industry is being affected by global disruption, technological advancements, and changing consumer behavior.
The traditional business model continues to be the design, manufacture, sale, servicing, and financing of vehicles.
The automotive industry is also racing towards a new world driven by sustainability, changing consumer behavior, and onboard sensors. This includes electric vehicles, connected automobiles, mobility fleet-sharing, new business models, and always-on connectivity.
Learn from Continuous Disruption
The automotive industry suffered during the initial pandemic lockdowns. Global supply chains were halted, dealers and manufacturers temporarily closed, and people stayed at home and drove less.
Industry experts, however, say that despite the initial slowdown in digitalization, the pandemic has actually accelerated the progress.
The auto industry is not experiencing its first or last major disruption. Many believe the auto industry, and especially automotive suppliers, have learned from past economic hardships.
Lessons learned from the 2008-2009 economic downturn ensured that auto suppliers were better equipped, more resilient, and able to bounce back.
Automobile manufacturers are now facing a shortage of semiconductor chips that is affecting vehicle production.
The disruption of supply chains and operations has accelerated many business and technology trends.
Disrupt yourself or be disrupted.
Most of the trends in the automotive industry are driven by the availability and adoption of advanced technologies.
Connected cars, sensors, electrification, and new business models (including mobility-as-a-service) all take advantage of advanced technology solutions. The automotive industry should focus on these areas, say industry experts.
It is a challenge for the entire industry, including suppliers and automakers, to maintain profitability while building capacity to handle these innovations.
Businesses must strike the right balance in order to maintain a profitable and stable business while also leading the way by disrupting their business models.
Innovation is the Key
Some industry leaders believe that innovation and flexibility will be crucial to the future of the automotive industry.
Joachim Skarpil from Capgemini, the Head of Automotive Suppliers, explained in a recent Webinar that “the future innovations will be achieved through software components and each automotive provider needs to find their own individual solutions.” In order to achieve this, it is necessary to develop new products or products that have unique services and new business models.
The Future of Mobility
What will the future look like for mobility in the real world? In this area, there is already so much innovation and collaboration that mobility innovations have begun.
Here are some examples:
- Autonomous cars that can be connected to the Internet and offer a platform for new business models.
- Vehicles are equipped with hundreds of Internet-connected engine control units (ECUs), sensors, and other devices.
- It is possible to bundle new subscription-based services such as parking, charging electric vehicles (EVs), ridesharing, and car sharing with vehicle sales.
- Algorithm-based Insurance based on Data from Connected Cars
- As more fleets electrify, the already high level of fleet services will continue to increase and expand, including charge point operations.
Automotive companies have five strategic priorities to help them balance their need to be profitable with the development of disruptive business models and solutions.
- Customer Centricity: Many car dealers and manufacturers found new ways to communicate directly with their customers during the pandemic and plan to continue this relationship.
- Mobility Services: The loyalty of customers will shift from brands and dealerships to integrated services that are convenient and integrated mobility options. The future will be based on new business models such as pay-per-use and subscription-based mobile.
- Connected vehicles: Companies need to design and manufacture cars that are more intelligent and connected in order to keep up with the ever-changing mobility landscape.
- Smart manufacturing and digital supply chain: Manufacturing networks and supply chains must become more flexible, modular, and resilient. The future success of your business will depend on how you work with suppliers.
- Changing workforce: Companies must adapt their recruitment, retention, training, and retirement strategies to meet the needs of a rapidly changing workforce. The traditional skills of automotive companies that were heavily focused on engineering are changing. They will need software skills throughout the entire automotive value chain.
Changing Customer Demands
Automobile companies must innovate and develop new solutions quickly to respond to the changing needs of customers and market opportunities.
In the digital age, innovation is a key component of every department and discipline. This will allow for improvements to be made in all areas, including the top line, bottom line, and green line.