“Digital Transformation” in Automotive Industry Part1


 In Brief

Approaching the 4th industrial revolution (4IR), the world celebrates the IoT for bringing forth irrefutable efficacy and integrity to our ways of doing things through the amalgamation of optimized clean energy, digital supply chain and real time telecommunications. All of which, spells a paradigm shift for the auto industry. On the telecommunications front, 7 key technologies are poised to digitize the auto industry to keep up with ever-changing digital consumers: Autonomous Driving, Connected Supply Chain, Predictive Maintenance, Mobility-as-a-Service (MaaS), Data Security and Protection, and 5G Network!! 


Urbanization is expanding at a staggering pace and it’s here to stay. More than half of the world’s population now live in a bustling metropolis, 90% of which reside in a developing nation. Urban consumers increasingly depend on and demand progressive complex digital infrastructures to carry out all daily activities mainly via a smartphone, according to Accenture. As such, digital agility, connectivity and access to digitized information have become determinant factors for automotive trends. Business models and new products must be able to respond to digital societies in a timely manner. While the over-60 age group is expected to compose 11-22% of the world’s population between year 2000 and 2050, 2 billion will become teenagers with an appetite for digitization that marks a paradigm shift in consumption behavior. Accordingly, the ability for operators to understand, predict and adjust to sentimental shifts become a vital component to success.

By 2020, it is highly expected that the digitalization of the auto industry alone will see investments in the highs of $82 billion dollars. In response to governments around the world, lead by China, to ban fossil fuel based cars by roughly 2030, the majority of automakers have decided to jump on the clean-cleaner energy bandwagon, once and for all, to meet their customer needs in a better way. On the telecommunication front leapfrogging ahead with cloud computing, big data and analytics, broadband connectivity and a plethora of opportunities in e-commerce, free flowing information, online education and a new sharing economy altogether, turning everything downside up, automakers are more than happy to get up to speed with automobiles that break new grounds as well. They are updating for the customers everything from the searching and buying process, all the way to the driving experience in the cars of their dreams. Indeed, we are about to see a new auto industry, altogether.

Digital Source

Originally, the process of searching and buying a car starts with attracting customers to commercials on television, newspapers or directly approaching them by salesmen, to initiate conversations that ultimately lead to closing the deal. Customers, however, didn’t really have much of a choice when it came to comparing different options in the same price range or sales-premium conditions. And that is what limited involvement in the process. Things have changed nowadays. Social media has opened the door to a new world where customers are granted personal access to an unprecedented level of personification with feedback flowing freely from other experienced customers with first hand experiences, along with a host of verifiable pertaining information as well as fake news. They have every opportunity today to get a second third or even a fourth opinion before narrowing down particular makes, models and agencies. Truecar.com, for example, gives in-depth information in comparing different specs and prices of various models, either brand new or secondhand used cars. Thus, a new car buying experience where the customer already knows everything before marching into the showroom with backup at the tip of their finger. Unverifiable hot air can lead to unnecessary hunches. Lot lizards today are not only expected to shorthand mickey’s F & I to pipe smokers and babysitters, they have to reference credible source information online as well. All of which is leading car dealers of the 21st century to further digitize their game.

The German auto giant Audi leads by example on digital adaptation. The digitized showroom in London, UK, applies tablets, video walls, tabletop touchscreen and augmented-virtual reality to create on a large screen amazing 360 degree in-outdoor 3D rendering experiences with sound effects for customers in real-time where listed descriptions change with the customer’s selection of make and model, as if the actual physical unit was being displayed in front of them. The Audi Application in the showroom also offers a variety of entertaining features such as car racing and 3D walkthroughs.

Autonomous driving

Autonomous Vehicle (AV) is continually developing for the automotive industry. Tesla’s Elon Musk declares on every opportunity his commitment to the development as an automaker and it seems his words are transcending reality sooner than anyone would have guessed a decade ago. Thanks to advancements in GPS, digital camera sensors, interconnecting devices, AI and the algorithms that joins everything together perfectly, such autonomy is now a beacon for minimized accidents and road deaths, as well. Assisted-driving models, a brainchild of AV technology, is also very likely to transpire within the next 10 years at a lower cost. On the flip side, given improved security that hinges on the IoT, inadvertently, ensuing cyber security threats becomes the next big hurdle for AV to overcome.

Connected Supply Chain and Improved Manufacturing

Digital transformation will customize and personify consumption experiences, and be that as it will for the automotive industry. Connecting disconnected supply chain components carries a vital promise of optimizing logistics operations, cost management and engage even more consumers as more information is collected and analyzed to meet the needs of in a broader operational territory. Decentralization is made easy with optimized transparency and system integrity for the entire supply chain that operates on a leveled playing field. Production design, manufacturing and distribution-shipping will be revamped with IoT and AI blueprints, creating a Smart Factories that automate transactions systematically while robots work with humans to reduce complexity, thus, enhanced production capacity, by some estimates, up to 830% while production waste is minimized. The determinant factor for Smart Factories, nonetheless, is the high upfront cost.

Predictive Maintenance

Given advanced self-diagnostic systems, motorists concern of poor car quality is no more. The predictive maintenance system automatically alert mechanical problems to all concerning agencies proactively. A quality much to automakers’ delight as they no longer have to worry about scaled defects and derailing call backs. A great example is Michelin Tire Care program, a fully digitized nationwide fleet tire monitoring system which allows fleet operators and maintenance managers much needed information and technical insights from each tire necessary to attain the best ROI from their tire assets. Reduced number of road service calls, improved compliance, safety, accountability scores, improved fuel economy and longer tire life, are all qualities that can be expected from the program. Data is stored and connected to a Fleet Asset Monitoring system and connects the Original Equipment Manufacturer (OEM) to the customer. Maintenance services will continue throughout the lifespan of each tire.

Mobility-as-a-service (MaaS)

As Uber and Lyft rightly earned “The Disruptor” title, the automotive industry is shifting away from personally owned modes of transportation towards Transportation-as-a-Service (TaaS), also known as Mobility-as-a-Service (MaaS), or mobility solutions consumed as a service rather than proprietary right to a physical product. Thus, on one hand, maximizing the utilization rate of the world’s most expensive idled product. On the other hand, minimizing or eliminating all costs associated with private ownership, e.g., gasoline, maintenance, insurance, tax and other state related fees. A number of major automakers and joint efforts with IoT technological hubs have successfully deployed similar transport solutions and ride-sharing concepts with immensely satisfactory results in strategic areas, mainly due to the win-win overall cost effectiveness that satisfies all parties. Automakers will be making a fortune from service fees, in lieu.

Data Security and Protection

Nowadays the automotive industry has become the second largest information-based business in the world. Intelligent Vehicle of the future will collect information about the driver, destination, path as well as road conditions. Major automakers such as Jaguar and Rover have developed a Smart Car to study driving habits while ensuring utmost confidentiality of customer information. Cyber security, yet, remains the biggest challenge for IoT operators, to-date.

5G Technology

Given technology advancing at this rate, the connectivity of scaled Smart devices and transactions that constitute Big Data cannot be implemented without a 3G/4G network. And that is where 5G technology comes into play. As typewriters transformed to PCs, 5G can handle over a billion IoT devices and more importantly, process information to create new opportunities for virtual reality or augmented reality, smoothly.

5G will be the driving force for automobiles and future public transit systems. With 5G capabilities, bandwidth speed and real-time processing connects vehicles to passengers as well as surrounding infrastructure such as pedestrian ways, buildings and traffic lights that 4G can not do, thus an invigorated Smart City concept brought to life. By the beginning of this year, 13 cities in the US will start using 5G to internet with everything, daily.

The International Consumer Electronics Show (CES) is an annual trade show held  In January 10-12 of 2018 in Las Vegas Convention Center, Nevada, US. Industry giants along with over 100 companies and joint programs showing off inventions and high-tech consumer electronics, one of which drew a particularly big crowd. Ford and Autonomic are working together to build a Transportation Mobility Cloud, or a smart city cloud platform for municipals to build infrastructure to vehicle  communication structures like connected traffic lights and parking lots, according to Ford CEO, Jim Hackett. Developed by Qualcomm Technologies, Inc., the Cellular Vehicle-to-Everything (C-V2X) technology directly connects vehicles with components in the surrounding environment, namely other vehicles (V2V), to pedestrians (V2P), to roadway infrastructure (V2I), and to the network (V2N), thus providing the foundation for a smart city where vehicle transports can be managed autonomously. Transloc, a technology provider for City Microtransit Solution, is also streamlining public transportation with innovations that will play a role to connect the industry with everything moving in a smart city in the near future. Stay tuned to get the latest update on this immensely sci-fi development, here.

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Reference and photos medium.com, convergetechmedia.com, futurism.com, Accenture.com, ces.tech, pexels.com

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