Market uncertainties, decreasing vehicle ownership, and increased shared services are making automotive OEMs re-think their business models leading to significant growth in the auto-extended universe which is focusing on the services model.
Several factors are steadily driving the revolution in the auto industry as it moves towards connected and autonomous cars. Increasing competition from emerging market players is forcing global players to rethink product innovation amidst mounting pressure from governments and regulatory authorities for environmental-friendly product portfolio.
Changing preferences of an average commuter, especially the younger demographic and declining interest in car ownership is forcing car manufacturers to come up with innovative features to lure customers. The future of travel is pushing boundaries and is getting redefined in order to deliver an enhanced, hassle-free, and safe commuting experience.
The utility of a phone has gone way beyond vocal communication; experts believe that the car will sooner or later follow a similar path and go beyond transportation with commuters looking for much more in their cars. For example, cars will be expected to perform self-diagnosis of their components and engine and transmit data that can be accessed to provide meaningful insights. In short, the car of the future will have a seamless merger of car mechanics and technology.
The auto trinity – car, software, and service
Auto makers will be looking beyond the hardware component of the car towards embedded software applications, software upgrades and more in a bid to enhance the service levels. In short, the trinity of car, software, and service will rely heavily on platform and everything-as-a-service (XaaS) and change the face of transportation in more ways than imagined.
The platform of the future will cut across boundaries between auto OEMs, auto dealers, insurance companies and users (enterprise fleets or individual owners) to ensure a non-siloed and seamless connectivity which will enhance the combined efficiency and productivity of the ecosystem. It will also ensure transparency across the value chain resulting in higher trust levels between stakeholders, thus leading to enhanced customer service and benefits.
A host of mobile platforms have already made their way into the market such as Android Auto, Blackberry QNX, Ford SYNC, and AGL. Many OEMs are going with one or a combination of these mobile platforms in a bid to build a smarter car.
Imagine a scenario where everything necessary to run a connected car is sourced over the Cloud. Such a scenario will benefit auto makers immensely, while delivering a great experience to the end user. Today, some of the leading automotive manufacturers in the world are investing in Cloud technologies to obtain benefits across the value chain – from designing to assembly to aftermarket services. One of the biggest advantages perhaps, will be lowered costs as Cloud erases the need for an exclusive and exhaustive IT infrastructure.
Digital platforms can also enable rapid delivery of applications and allow for synergies of standardization, reusability, and modernization. Digital Platforms provide the inertia required to cater to dynamic needs of the automotive ecosystem. Along with delivering a personalized and connected consumer engagement, digital platforms can help the automotive ecosystem with faster turnaround cycles, the ability to dynamically scale up and down, and with zero downtime.
There are various services that can be enabled through XaaS model such as:
- Infotainment: Commuters can tune into the latest news, entertainment and other relevant material with personalized content.
- Vehicle Health: Visits to service centers can be reduced and vehicle health status can get automated as software applications can conduct a health checkup and provide diagnostic information in real-time.
- Telematics update: Driver behavior, vehicle usage, acceleration, and other information gathered from the Electronic Control Unit (ECU) through telematics devices will be delivered to passengers on their mobile phones. For fleet owners, this will be a massive advantage as the data can be accessed live and information and alerts can be passed onto drivers instantly.
- Software updating services: In-vehicle electronic equipment and mobile applications have a need for regular firmware and software upgrades. Remote vehicle upgrade service can help OEMs enhance customer service as it safely and securely manages all the updates.
- Aftermarket services: Devices and components which help drivers perform better are getting better acceptance and relevance today. Services such as driver assistance, lane parking, back-up camera, vehicle tracking, etc. can be provided to ensure a much more enhanced driving experience for the customers.
Platform applications and XaaS support will enhance the functionality of an automobile, reduce manufacturing costs, enhance customer support, build customer loyalty, and initiate newer revenue streams for auto makers. On the consumer side of things, they will enhance the commuting experience through a stress-free, pleasant, and a more enjoyable travel.
The car of the future will no longer be a standalone commute vehicle; rather, it will present itself also as a medium for entertainment and information and even steer towards driverless capabilities. There is still some time before this becomes a reality but technological advancements and R&D efforts are fast laying a path towards that objective.
Author: Ashish Mital, AVP-Digital Platform, Digital Transformation Services
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