Why should you put gear towards digital transformation in the Automotive Industry?
May 21, 2024

Just be honest, when you were 12 years old, did you ever imagine that your life would be this much digitalized by 2024? If you take your  memories a decade back, wouldn’t it be difficult for you to think about how technology will be so infused into your lives in the coming years?

Well, as you know every industry has been now digitalized directly or indirectly and the Automotive industry is no exception. According to a study, automotive manufacturers are expecting that their plants will become smart factories by almost 24%. In addition to this, 49% of automotive manufacturers have already invested more than $250 million in smart factories. Isn’t this a huge number in itself?

Well, after seeing this one thing is clear: The digitalization in the automotive industry is a growing investment and only going to expand its branches. So, it’s very safe to say that automotive digital transformation will definitely have a promising future ahead.

But you must be wondering, how such a major shift happened suddenly, right? We’ll look into all of this and dig a little deeper to see what’s exactly going on due to digital transformation in automotive industry. So, let’s begin.

What is digital transformation in automotive industry?

Digital transformation in the automotive industry is all about using new technology to change how automobiles are made and sold. It involves futuristic approaches like using next-gen technologies and smart machines to improve the way automobiles are built and making them able to connect to the internet and other devices with utmost ease.

One big part of this is making ‘smart’ cars that can transmit signals to humans and things like traffic lights. This helps with predicting when a car needs maintenance, thus, making driving safer.

But, it's not just about buying cars, though. Digital transformation has also led to new ways of getting around, like ride-sharing and car-sharing services. These let people use cars when they need them without having to own one.

What is digital transformation in automotive industry

The auto industry is changing fast, mainly because of new tech in automotive factories and next-gen features available for consumers. So, digital changes are helping them work better, be more efficient, and keep up with what people want in the fast-changing auto world.

How digital technology is revolutionizing auto industry?

Digital technology has sparked a revolutionary transformation within the auto industry, reshaping every aspect from design and manufacturing to user experience and safety. This digital revolution encompasses a myriad of innovations, each contributing to the industry's evolution in unique ways which are mentioned below:

1. Design and Engineering of the Future

In today's auto industry, computers play a big role in designing and making cars. Designers use special computer programs to make detailed and precise car designs. They can even see and interact with these designs in virtual reality, which helps them make better decisions before building the real thing.

2. Smart Manufacturing

When it comes to building cars, factories are getting smarter. Machines do a lot of the work now, and they're really good at it. Robots and computers help assemble cars with great accuracy. Plus, factories can keep an eye on everything in real-time, which means they can fix problems before they happen, keeping production running smoothly.

3. In-Car Tech

Cars are becoming more like smartphones on wheels. They can connect to the internet and do lots of futuristic things. You can use your car's screen to get directions, listen to music, and even talk to friends. Apps like Apple CarPlay and Android Auto let you use your phone's apps right from your car's screen, making driving safer and more fun.

How digital technology is revolutionizing auto industry

4. Safety on the Road

Technology is making cars safer than ever. New features like sensors and cameras help cars watch the road and avoid accidents. Some cars can even drive themselves a little! These features, called advanced driver-assistance systems, help drivers stay safe and focused while driving.

5. Digital Customer Experience

Buying and owning a car is easier thanks to technology. You can customize and buy a car online, and then manage it from your phone. Companies use computers to learn about what you like and offer you better services. This makes customers happy and keeps them coming back for more.

In short, technology is changing the auto industry in big ways. From how cars are designed and built to how we use and interact with them, digital innovation is driving us towards a future where cars are safer, smarter, and more convenient than ever before. But what’s in the news when it comes to the automotive industry? Let’s see that too.

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Digital transformation trends in automotive industry

To stay ahead in the auto industry, companies need to keep up with the latest digital trends that are shaping the way cars are made and sold. Here's how you can apply some of these trends to grow your business:

Robots in Manufacturing

Using robots to build cars isn't new, but it's becoming more common and sophisticated. Take BMW Group, for example. They've started using cutting-edge systems powered by NVIDIA technology. These systems include robots that can move materials around and even help assemble parts of the car.

Virtual Car Tours

Nowadays, you don't have to visit a dealership to check out a car. Many manufacturers are offering virtual tours on their websites. This means you can explore every inch of a car from your own home. It's a game-changer for car shopping, making it easier and more convenient than ever before.

More Sensors for Safety

Cars are getting smarter, and that's thanks in part to sensors. These little gadgets are in high demand, especially for features like automatic braking and self-driving technology. Studies show that the demand for these sensors is only going to grow in the coming years.

Connected Cars

People want their cars to do more than just drive. They want them to connect to their phones, their favorite apps, and even their social media accounts. That's why car manufacturers are adding more connectivity features to their vehicles. From personalized navigation to easy parking payments, these features are making driving a whole lot easier.

Electric Vehicles (EVs) on the Rise

With concerns about climate change growing, more people are turning to electric cars. Companies are ramping up production of EVs and expanding their charging networks to meet the rising demand. This shift toward electric vehicles is not just a trend but a significant transformation in the industry.

Digital transformation trends in automotive industry

Subscription-Based Models

Buying a car outright isn't the only option anymore. Subscription-based models, where customers pay a monthly fee for access to a car, are becoming increasingly popular. It offers flexibility and convenience, appealing to consumers who prefer not to commit to long-term ownership.

AR-Powered Maintenance

Augmented reality is making its way into car maintenance. Mechanics can now use AR glasses to see digital overlays of repair instructions or diagnostic information while they work on a vehicle. It streamlines the repair process and ensures accuracy, ultimately reducing downtime for the customer.

3D Printing in Manufacturing

3D printing technology is revolutionizing the manufacturing process. Car parts can now be printed on demand, reducing waste and speeding up production. It also allows for more intricate designs that were previously impossible with traditional manufacturing methods.

Shared Mobility Services

Car-sharing and ride-hailing services are changing how people think about transportation. Instead of owning a car, many urban dwellers are opting to use these services when they need a ride. It's a cost-effective and environmentally friendly alternative to traditional car ownership.

Personalized Driving Experiences

With advancements in AI and data analytics, cars can now learn and adapt to their drivers' preferences. From adjusting seat positions to recommending routes based on past driving habits, personalized driving experiences are becoming increasingly common, enhancing comfort and convenience for drivers.

Therefore, by staying informed about these trends and embracing innovations that align with your business goals, you can position your company for success in the dynamic automotive landscape.

Benefits of automotive digital transformation

As various sectors of manufacturing digitization at varying paces and for different purposes, the automotive industry stands out as a leader, accounting for a significant portion of global digital investment. While the financial commitment is substantial, the increasing online presence presents considerable advantages for dealerships, including:

1. Revenue Growth Boost

In today's fast-paced automotive market, dealerships need to keep up with digital trends to make more money. People are increasingly shopping online, so having a strong online presence is crucial. Let's look at some ways digital tools can help dealerships sell more cars.

  • Robust e-commerce capabilities are indispensable for revenue growth, aligning with society's growing preference for digital purchasing options.
  • Recent research highlights that the ability to search for nearby vehicles and check availability drives sales on automotive websites.
  • Customer preference for email communication over other channels underscores the importance of online features and usability in influencing sales.

2. Improved Buyer Experience

Buying a car should be easy and tailored to each person's needs. Dealerships are using technology to make the car-buying process smoother and more personal. From seeing what cars are available in real-time to customizing options using virtual reality, let's explore how these advancements are changing the way we buy cars.

  • A thriving e-commerce market enables dealers to offer personalized and streamlined purchasing experiences, empowering customers with new conveniences.
  • Features such as real-time inventory visibility, online self-service options, and VR-driven customization cater to individual preferences, placing customers in control.

3. Cost Reduction

Competition in the car industry is tough, so finding ways to save money is essential for dealerships. Luckily, digital tools can help cut costs while also making more sales. By using data and automation, dealerships can work smarter, save on expenses, and make more profit. Let's dive into some ways digital innovation can help dealerships save money.

  • Leveraging digital solutions, dealers can increase revenues while reducing costs by utilizing consumer data insights effectively.
  • Access to actionable insights and automated data-driven modeling enhances customer predictability, expediting the sales process and improving satisfaction.
  • Benefits include addressing customer pain points, minimizing labor costs, shortening transaction times, and enhancing efficiency through self-service capabilities.
Benefits of Automotive Digital Transformation

4. Expanded Customer Reach

Having a strong online presence is crucial for attracting new customers and keeping them loyal. Dealerships can use their websites to reach more people and show off what makes them special. By providing helpful information and making their websites easy to use, dealerships can attract more customers and keep them coming back. Let's explore some strategies for reaching more customers online.

  • By delivering memorable experiences and facilitating informed purchasing decisions, dealers can attract new prospects, expand their client base, and foster brand loyalty.
  • Websites serve as vital resources for customers to evaluate during the selection process, guiding their considerations and identifying vehicle features.
  • Key website elements include user-friendly navigation, compelling imagery, fast loading times, and transparent information to drive foot traffic to showrooms for purchases.

5. Increased Marketing Effectiveness

Traditional marketing methods like newspaper ads and billboards are becoming less effective in reaching today's tech-savvy consumers. Digital marketing, on the other hand, allows dealerships to target specific demographics, track the effectiveness of their campaigns in real-time, and adjust their strategies accordingly. This not only saves money by eliminating ineffective marketing channels but also ensures that marketing efforts are more precisely targeted for maximum impact. Why so? Let’s see how digitalization helps…

  • Targeted digital marketing to specific demographics
  • Real-time tracking of campaign effectiveness
  • Adjustment of marketing strategies based on data insights

In a fiercely competitive industry where omnichannel adoption is standard, these services are essential for automotive industries to thrive. But is there any definitive example that came into the picture due to digitalization?

Well, there are many companies that prospered in the automotive industry due to adopting digital strategies. Let’s read about them in detail.

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Examples of digital transformation in the automotive industry

The automotive industry is undergoing a profound digital transformation, revolutionizing how vehicles are designed, manufactured, marketed, and serviced. This transformation is driven by advancements in technology and changing consumer preferences, leading to innovative solutions and new business models. Here are some examples of digital transformation in the automotive industry.

Connected Vehicles

Modern cars are becoming increasingly connected, equipped with sensors, GPS, and internet connectivity. This connectivity enables features such as remote diagnostics, real-time traffic updates, and over-the-air software updates. Connected vehicles enhance safety, convenience, and efficiency for drivers while providing automakers with valuable data for improving vehicle performance and customer experience.

Autonomous Driving

The development of autonomous driving technology represents a significant shift in the automotive industry. Self-driving cars use advanced sensors, artificial intelligence, and machine learning algorithms to navigate roads and make driving decisions without human intervention. Autonomous vehicles have the potential to improve road safety, reduce traffic congestion, and provide mobility solutions for people with disabilities or limited mobility.

Electric Vehicles (EVs)

The rise of electric vehicles is another example of digital transformation in the automotive industry. EVs use electric motors powered by batteries instead of internal combustion engines, reducing greenhouse gas emissions and dependence on fossil fuels. The adoption of EVs is driven by advancements in battery technology, government incentives, and growing environmental awareness among consumers. Electric vehicles are also paving the way for new mobility services, such as ride-sharing and autonomous electric fleets.

Examples of digital transformation in the automotive industry

Digital Retailing

The traditional car-buying process is being disrupted by digital retailing solutions. Consumers can now research, customize, and purchase vehicles online through manufacturer websites, third-party platforms, or mobile apps. Digital retailing offers greater transparency, convenience, and flexibility for car buyers, allowing them to compare prices, read reviews, and complete transactions from the comfort of their homes. Automakers and dealerships are investing in digital tools and virtual showrooms to enhance the online car-buying experience and attract tech-savvy customers.

Predictive Maintenance 

Digital transformation is also reshaping how vehicles are serviced and maintained. Predictive maintenance uses data analytics, machine learning, and IoT sensors to monitor vehicle health and predict potential failures before they occur. By analyzing real-time performance data, automakers and service providers can schedule maintenance proactively, optimize parts inventory, and reduce downtime for vehicle owners. Predictive maintenance improves reliability, extends vehicle lifespan, and lowers operating costs for both consumers and fleet operators.

These examples demonstrate the profound impact of digital transformation on the automotive industry. As technology continues to evolve, automakers, suppliers, and other stakeholders must embrace digital solutions to stay competitive and meet the evolving needs of customers and society alike.

How is AI transforming the automotive industry?

In today's totally digitalized world, AI isn’t just rapidly changing the operations of industries, rather it's working like a game-changer, especially in the automotive world. It's like having a super-smart assistant in your car, making everything safer, smoother, and even more fun.

1. Safer Roads with Self-Driving Cars

Do you know those sci-fi movies where cars drive themselves? Well, thanks to AI, that's becoming a reality. Smart sensors and clever algorithms let cars see and understand the world around them, making driving safer and more predictable. Think fewer accidents and less time stuck in traffic- sounds like a win-win, right?

2. Smarter Manufacturing

Behind the scenes, AI is also revolutionizing how cars are made. It's like having a factory full of super-efficient robots that never get tired or make mistakes. From spotting defects to predicting when machines need maintenance, AI is making car manufacturing faster, cheaper, and more reliable.

3. Next-Level In-Car Tech

Ever wish your car could understand you better? With AI, it's happening. Voice recognition and personalized recommendations make the driving experience feel more like hanging out with a friend who knows exactly what you like. Plus, AI-powered infotainment systems keep you entertained and informed, turning your car into a rolling entertainment center.

How is AI transforming the automotive industry

4. Pushing the Limits of Design

AI isn't just making cars smarter- it's making them cooler, too. By crunching tons of data and testing out endless design options, AI helps engineers create cars that are lighter, faster, and more fuel-efficient. It's like having a virtual design guru who knows all the tricks to make cars look and perform their best.

5. Driving Towards a Greener Future

With climate change on everyone's minds, AI is also lending a hand in making cars more eco-friendly. By optimizing routes and managing energy usage, AI helps reduce fuel consumption and cut down on emissions. It's a small step towards a cleaner, greener future- one where we can all enjoy the ride without worrying about harming the planet.

So, whether you're behind the wheel or just along for the ride, one thing's for sure: AI is changing the way we think about cars, making them safer, smarter, and more sustainable than ever before. And with each new innovation, the future of driving looks brighter than ever.

How can Antino help you apply digital transformation to your automotive business?

The era of solely in-person car buying experiences is fading away. To stay competitive in today’s market, businesses must revamp and streamline the consumer journey to align with the automotive industry’s shift towards digitalization. As e-commerce continues to grow, dealers have access to various data-driven marketing tools to engage customers online, presenting a crucial opportunity for dealerships to adapt and thrive.

However, this window of opportunity for prioritizing digital innovation is limited, as more dealerships embrace these changes. Dealers must now fully embrace the potential of digital transformation to not only benefit their customers but also to remain competitive in the industry.

Reach out to us today and discover how Antino’s cutting-edge technologies can help your automotive business keep pace with the ongoing digital transformation in the automotive industry.

FAQ's

What is the digital disruption in the automotive industry?

Digital disruption in the automotive industry refers to the transformation brought about by technology, altering traditional business models and consumer experiences.

What is the impact of digitalization in automotive industry?

The impact of digitalization in the automotive industry includes enhanced connectivity, personalized experiences, and streamlined operations, reshaping how vehicles are designed, manufactured, and serviced.

How IoT is changing the automotive industry?

IoT (Internet of Things) is revolutionising the automotive industry by enabling smart vehicles with connected features like predictive maintenance, real-time diagnostics, and enhanced safety measures, transforming the driving experience and optimising vehicle performance.

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AUTHOR
Radhakanth Kodukula
(CTO, Antino)
Radhakanth envisions technological strategies to build future capabilities and assets that drive significant business outcomes. A graduate of IIT Bhubaneswar and a postgraduate of Deakin University, he brings experience from distinguished industry names such as Times, Cognizant, Sourcebits, and more.