What’s in for Automotive in this decade and beyond?
In order to build a truly digital native culture in a certain industry, business or organization, the foremost way to go about is by building a customer centric approach. A well established example of Nokia and Blackberry downfall provides us with all the precautions to be taken while running a product or a business.
A business cannot stay arrogant and stubborn over the design, user interface, customer approach of their product for a longer duration, unless its Apple Inc, although Apple has successfully cracked the code of keeping their customers happy and satisfied while maintaining their niche in the products they offer. Its a good mix of psychology, market understanding and product pitch that helps Apple to stand out and remain sensibly stubborn.
According to Yahoo finance review, in a list of 10 biggest industries in the world in 2021–22, Automobile industry ranks at 9th position with a projected growth of just under nine trillion U.S. dollars by 2030. It is anticipated that new vehicle sales will account for about 38 percent of this value. Globally, Volkswagen Group and Toyota Motor are the leading carmakers in terms of revenue. The Japanese auto giant generated almost 250 billion U.S. dollars in revenue in 2020, while Volkswagen raked in a little more than 245 billion U.S. dollars.
The year 2020 was horrible for the auto industry due to manufacturing restrictions. According to new data from Inovev, global automotive manufacturing dropped by 21% in the first ten months of 2020 as a result of the coronavirus outbreak, compared to the same period in 2019. On the other hand, electric vehicles (EVs) are gaining demand in the European Union as government offers cash incentives. In Germany, privately-held EVs registered before the end of 2020 will be eligible for a 10-year tax exemption, while EVs with an original cost under €40,000 will be entitled to a €9,000 subsidy until December 2021. Electric vehicle purchasers in France could be eligible for up to €12,000 in subsidies.
As environmental concerns — and high gas prices — take center stage, more people are turning to electric cars, and legacy automakers are looking to get in on the action in a bigger way — putting up a challenge to Musk’s Tesla, which has 79 percent of the EV market in the US, according to data-tracker IHS.
Now Volkswagen and Toyota plan to invest a combined $170 billion in the next few years as part of a strategy to scale up their transition from internal-combustion engines to battery-powered vehicles.
The automotive industry is making giant strides towards technological developments, and over the years, vehicles have become smart. Audio systems don’t just play music, and cameras do more than help drivers reverse. Also, vehicles are getting cleaner with numerous EV launches in the two, three, and four-wheeler segments. If 2021 was exciting, the following year promises more. Below are few trends to watch out for in 2022.
As per an article published by pwc.com, the upcoming hot topics of Automotive are described as “eascy” i.e. electrified, autonomous, shared, connected and yearly updated.
Electrified: The transition to emissions-free individual mobility would hardly be possible without the electrification of the drive train. First, there is the issue of local components — the fact that cars now only emit very low levels of harmful substances, dust and noise. It also seems that going “emissions-free” will be a global initiative: The idea is that the electricity used to charge the vehicles will come from renewable sources to ensure CO2 -neutral mobility.
Autonomous: The rapid progress made in areas such as artificial intelligence, machine learning and deep neural networks make it possible to achieve what until recently seemed utopian — namely the development of autonomous vehicles, which require no human intervention even in complex traffic situations. This will completely redefine the use of individual mobility platforms. New application scenarios are emerging that would have been unthinkable just a few years ago.
Shared: For several years, many big cities have offered car-sharing facilities. While these are currently often run as pilot projects or citizen initiatives, sharing concepts will become economically viable with the introduction of autonomous vehicles. It will no longer be necessary to search for a shared vehicle in the surrounding area: instead it will be possible to order vehicles to wherever the user happens to be via a convenient “on demand” service.
Connected: The fourth “eascy” dimension is the networking of cars with the outside world — summarised by the concept of the Connected Car. This term actually represents two concepts at once. On the one hand, it applies to Car2Car and Car2X communication, which is the networking of the car with other cars or with the transport infrastructure (such as traffic lights). On the other hand, the term also covers the networking of vehicle occupants with the outside world. In future, they will be able to communicate, work, surf the internet or access multi-media services during the journey
Yearly updated: The development topics of electrified, autonomous, connected and shared will lead to a clear increase in the rate of innovation within the automotive industry. Model cycles of five to eight years, which have always been common in this sector, could soon be a thing of the past. Instead, the range of models will be updated annually in order to integrate the latest hardware and software developments. As customers will naturally not want to buy a new vehicle every year due to the high purchase costs, the short innovation cycles will enter the market primarily through regular upgrades of shared vehicles.
From the customer’s point of view, the five dimensions are associated with numerous benefits. All predictions suggest that driving will become easier, safer, cheaper, and more comfortable. At the same time, the revolution in individual mobility will force the automotive sector to reinvent itself to a certain extent.
“eascy” focuses on the mobility needs of the customer, not on the technical product itself. The transformation of the automotive industry will be driven to a large extent by younger, technically savvy generations.
Autonomous Vehicles: Autonomous vehicles or self-driving vehicles aim to minimize the need for human drivers and look poised to transform everyday transportation. Fleets of AVs expand the scope of last-mile deliveries, reduce downtime, and aim to make public transportation relatively safer. For example, by reducing accidents caused due to driver fatigue or negligence. AVs are equipped with advanced recognition technologies, such as AI-enhanced computer vision to identify obstacles along the route.
Connectivity: Nowadays, vehicles come with a tamper-proof digital identity that differentiates them from other vehicles in the network. This enables easy tracking of vehicular data for various use cases such as insurance, driver safety, predictive maintenance, and fleet management. Sharing vehicular data helps not just the individual customer, but overhauls the entire mobility ecosystem.
Electrification: The depleting fossil fuel reserves and the harm to the environment caused by their use call for promoting the use of electric vehicles (EVs). For greater adoption, EVs need to address issues such as high price, poor battery, inadequate charging infrastructure, fleet electrification, as well as powering renewable energy-based charging grids.
Shared Mobility: With connected vehicles, new business models have come up that focus on shared mobility as an alternative to traditional vehicle ownership. This enables mobility-as-a-service (MaaS) and discourages unused vehicles. Such solutions meet the requirements of a city or a business without adding new vehicles, thus reducing waiting time for fleets and pollution caused by petrol or diesel vehicles.
In the United States, ridesharing is a $30 billion market and growing. The country now has approximately ten metropolitan areas that generate $500 million or more in yearly ridesharing revenues, and compound annual growth rates are north of 150 percent.
Artificial Intelligence: Artificial intelligence technologies such as machine learning, deep learning, and computer vision find applications in robotic automation within the automotive industry. These guide self-driving cars, manage fleets, assist drivers to improve safety and improve services such as vehicle inspection or insurance. AI also finds applications in automotive manufacturing, where it accelerates the rate of production and helps reduce costs.
Big Data and Data Analytics: In the age of big data, advanced data analytics informs various decisions throughout the lifecycle of a vehicle. Data gathered from vehicles enables predictive maintenance, informs managers about their fleets, and alerts concerned authorities in case of accidents. Moreover, customer automotive data finds applications in driving sales, optimizing supply chains, and enhancing product design for newer vehicles.
Human Machine Interface: As self-driving cars and connected cars transform the automotive landscape, it will fundamentally change how drivers interact with vehicles. Human-machine interfaces (HMI) use voice-based or haptic feedback to operate vehicles. These expand the scope of how and what aspects of a car that users control. Consequently, such interfaces make the driving experience safer and more enjoyable. Another form of HMI includes smart virtual assistants who help drivers and riders interact with the vehicles and other service providers.
“Automotive HMI design market size will exceed $27 billion by 2024”.
Report, Global Market Insights, Inc.
Blockchain: Blockchain finds multiple applications in the automotive industry. These include sharing vehicle data over a secure network for connectivity and shared mobility solutions such as ride-hailing, urban transportation, and deliveries. Moreover, it finds application in verifying the supply chain of spare parts or making sure that the raw materials and spare parts are sourced exclusively from legal and trusted sources.
Additive Manufacturing: 3D printing helps the automotive industry in three primary ways. Firstly, it enables rapid prototyping with 3D printed models that accelerate the design and testing phases of production. Secondly, it allows manufacturers to print spare parts to match their requirements. Lastly, additive manufacturing of composite materials leads to automotive parts that are lighter, stronger, and more durable.
Internet of Things: In the automotive industry, IoT enables secure communication between vehicles as well as vehicles and infrastructure components. The technology improves road safety, solves traffic congestion, and reduces pollution and energy expenditure with better fleet management. Startups and emerging companies develop advanced sensing technologies to gather more data about the vehicle as well as allow the vehicle to understand its surroundings. The technology also automates payments for fuel and tolls.
In the future, of course, both car owners and riders in passenger vehicles will need to be convinced of the value of new offerings — particularly those commanding a price. They will also need assurances that the data they are increasingly willing to share are secure. Meanwhile, companies will have to organize themselves around new, customer-centric business models and be open to partnerships, particularly with digital giants and innovative start-ups.
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