Industry set for paradigm shift
The automotive industry is set for a paradigm shift based on five pillars, constituting the next generation of growth opportunities according to Frost & Sullivan.
Those five pillars are centred on: connected supply chain; industrial Internet of Things and Industry 4.0; connected and autonomous car; digital retailing and vehicle relationship management; and mobility as a service (MaaS).
The verdict was the result of a roundtable debate hosted by Frost & Sullivan, in partnership with IBM Watson IoT, which featured the perspectives of leading OEMs’ senior executives and digital leaders.
The debate centred on how the rapid pace of digitisation is transforming the component-driven automotive sector to a software- and solutions-focussed industry, accelerated by consumers’ evolving digital lifestyle expectations and demands for new and innovative services.
It concluded that by 2020, Internet-connected vehicles will be the number one application, transmitting over 350 KB of data per minute.
According to Sarwant Singh, Senior Partner at Frost & Sullivan, the auto space is progressing towards mass adoption of 4G LTE and, ultimately, 5G as well as satellite broadband systems.
‘The advent of autonomous vehicles will give rise to a plethora of services, and personalisation of the travel experience will be of critical importance. Connected autonomous technologies will increasingly render the car a platform for drivers and passengers to use their transit time for personal activities, which would include the use of media and other service packages,’ explained Sarwant.
In the future, Sarwant suggested we will see an increased focus on packaging services like LBS (location based services), consumer OTA (over-the-air), infotainment with mobility, insurance, remote upgrades, prognostics and extended warranty-related services, expected to become revenue streams for car owners.
An area where the impact of digital disruption will be particularly prevalent is the unbundling of the automotive retail network. The future of automotive retail will transition from a transactional concept to an experience-based model using digital tools throughout the customer journey.
The roundtable forum also mooted the possibility of the car of the future morphing into a mobility platform. Transactions will be made based on time and miles covered. Most European OEMs are already progressing towards Car as a Service (CaaS).
By 2025, advanced technologies such as automated driving, connected mobility, EV charging, and health and wellbeing solutions will play a pivotal role in improving the experience offered by vehicle-sharing operators, according to Frost & Sullivan.
The Future of Mobility consists of technology-enabled, door-to-door, multi-modal travel, encompassing pre-trip, in-trip and post-trip services to improve the user’s journey experience.