The automotive sector has undergone a major transformation in recent years with the emphasis shifting from vehicle ownership to vehicle usage through ride sharing platforms and innovative vehicle sharing options. IBM’s new study regarding what the auto industry would look like in 10 years revealed that 48 percent of the consumers feel that the brand of the vehicle does not matter as long as it is cost effective and convenient to access.
The survey that IBM conducted covered 1,500 automotive executives across the world as part of a bid to understand the external factors that have an impact on the automotive industry today, and how they are likely to change the industry in the next decade. The Automotive 2030 study was developed by the IBM Institute for Business Value (IBV) and also covered over 11,500 consumers to gain an insight into what they expect from mobile digital experiences.
Titled “Automotive 2030: Racing toward a digital future”, the report states that for consumers, the brand of the vehicle is not as important as having access to the vehicles and the service when and where they need them most. The executives said that a vehicle’s ability to learn about its occupants, integrate with their devices and to have a natural conversation with them can further reinforce brand eminence and loyalty. Automotive manufacturers should see this as an opportunity to redefine their brand differentiators by taking to open digital platforms, changing the way they work and expediting efforts to re-skill their workforce. Mobility is being seen increasingly as a service and the car itself is a lot more than just a product or a possession. Thus, automotive companies should strive to provide their customers with personalized experiences that will increase the loyalty of consumers to the brand
“Around the world, automakers are preparing for an industry in which less than 50 percent consider their brand to be a competitive differentiator,” said Ben Stanley, Global Automotive Research Lead – Institute for Business Value, IBM.
He added that over the next decade, cars will soon be seen as networked machines where software is the most important aspect and in-vehicle digital experiences will be more important than actual driving features. Hence, automotive manufacturers will need to prioritize these to separate from the pack.
Half of the executives covered in the study said that their companies would need to reinvent their organizations with digital technologies, supported by data in order to flourish, or even to survive in the next ten years. In fact, 83 percent of executives who participated in the survey said that they understood the strategic value of data in their industry. This data can be used to support everything ranging from operational efficiencies to new business models to the consumer-facing digital experiences such as integration with other personal devices, personalized services and the ability to connect into other aspects of a person’s life. Yet, only 18 percent of those who were a part of the study said that they are operating on a digital data platform today.
“Digital reinvention will power the automotive industry towards autonomous, connected, electrified and shared vehicles built on diverse platform ecosystems,” said Dirk Wollschläger, General Manager Global Automotive, Aerospace & Defense Industries, IBM. “These ecosystems will be a mixture of technical, agile, high performance companies from multiple industries, each bringing their own specialization and value to the mix.”
With digital ecosystems becoming more prevalent in the auto industry, the workforce is also likely to face new challenges. When vehicles deliver personalized digital experiences and AI and autonomy are standard features, automakers must equip their employees from the bottom to the top levels with critical new skills. With a direct workforce of over eight million people, the industry will need to spend over USD 33 billion) in the next 10 years to upgrade their skills. Executives expect training and re-skilling budgets to drastically increase to achieve this goal.
Manju Mathew, an MBA in marketing, completed publisher training courses from the Oxford Brookes University and New York University. She started with marketing and PR roles before moving on to her current position as a full time writer. Currently living in Dubai, her life as an expat has sharpened her observation skills and flair for writing. She enjoys writing about luxury cars like Ferrari, Lamborghini, etc even if she can only dream of owning them.
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