Experts Say Big Data and AI to Play Key Role in Automotive Aftermarket in the Middle East

According to experts who spoke at the 12^th Automechanika Dubai Network meet, big data and analytics will transform the Middle East automotive industry and the regional aftermarket in a significant manner. These two factors will help industry players to optimize their value chain. The event which was held on 27 March was attended by over 100 aftermarket industry professionals and is a bi-annual gathering that focuses on key issues and trends affecting the regional automotive aftermarket. It was hosted by Messe Frankfurt Middle East, which organizes Automechanika Dubai, Riyadh, and Jeddah trade fairs.

Vishal Sanghavi, Project Manager for Automotive and Transportation at research and advisory firm Aranca spoke at length about the five year impact of mobility trends in the Middle East. He

said megatrends like electrification, connectivity, shared mobility, and the advent of autonomous vehicles will lead to a change in the manner in which profits are distributed across the value chain, with the emergence of new technologies leading to fresh opportunities.

Sanghvi said that the global automotive industry is currently undergoing massive transformation and Middle East too is set to experience this shift. Thanks to big data and analytics, aftermarket players would be able to optimize the value chain end-to-end using predictive maintenance data while providers of new technologies are set to become an integral part of the automotive value chain.

According to Sanghvi, growing demand for shared mobility is expected to lead to higher vehicle utilisation and this would have a positive effect on aftermarket revenues from spare parts and repairs. Connected cars in particular would provide repair and maintenance providers with unique insights into customer needs.

He said that the growth in connectivity opens up the possibility of closer, more immediate relationships of aftermarket players with customers. On the other hand, these aftermarket players will now need to work on the development of competencies that are needed to deal with the growing complexity of next-generation vehicles.

Sanghvi urged manufacturers to focus more on the development of connected car solutions, as connectivity is expected to be the fastest growing mobility trend in the region with advanced telematics solutions, vehicle-to-vehicle connectivity technologies and infotainment solutions being some of the most sought after innovations in the Middle East market.

According to 2018 figures, the connected car penetration is approximately 17 percent of the total number of vehicles on Middle East roads and this is expected to grow at a CAGR of 22 percent until 2023. It is expected that by the end of 2023, about 6.7 million vehicles on the roads in the region would have some level of connectivity features. Most new models that would be launched in the region, especially in the high-end segments are likely to have built-in connectivity features.

Other speakers at the event were Christophe Vloebergh, CASE Implementation Manager for Mercedes-Benz Cars Middle East; and Jorge Bialade, General Manager of YallaMotor.com, a leading automotive portal for the sale of new and used cars, car prices, car reviews and auto businesses.

Bialade said aftermarket businesses can use online tools for a greater level of engagement with customers, and agreed with Sanghvi that big data and artificial intelligence would prove to be crucial: “It’s clear that digitalisation and e-commerce will reduce the current frictions and bring more transparency to the purchase phase.”

“Additionally, big data and artificial intelligence will be an essential part for any business to better understand the customer needs. For example, everyone can eventually sell a battery, but those who are able to know precisely when that battery needs to be replaced will be at the forefront.”

Bialade also felt that electric vehicles can have a big impact on shaping the aftermarket in the future, though that would take a while. He said that YallaMotor.com conducted a survey that covered over 3,800 car buyers across the Gulf region and it indicated that over 44 percent of the respondents were willing to buy an electric vehicle in the next two years.

The transition is not going to be easy, however as there are still many challenges that need to be tackled by the automotive industry in order to expedite the adoption of electric vehicles in the region. Greater use of EVs means that there would be a change in aftermarket requirements as the focus would be more on software rather than hardware.

Vloebergh talked about Daimler AG’s Vision on the Future of Mobility and the manufacturer’s CASE (Connected, Autonomous, Shared and Electric) vehicle range. His viewpoint that the greatest change that would be seen in future years would be the changes in vehicle ownership as car ownership would change from the ‘solely exclusive car-ownership’ model towards a more ‘shared mobility use’ model in an autonomous way. He predicted that the next 5-10 years would be more disruptive for the automotive industry than the past 100 years, and this same change would be seen in the aftermarket as well.  On a global scale by 2025, Mercedes-Benz expects +/-1 of the 5 cars it sells to be electric-driven. In some regions, like the Middle East, this figure is expected to be about 10 percent.  Every single new CASE mobility model will offer new aftermarket opportunities.

Automechanika Dubai is billed as the largest trade fair for the automotive aftermarket in the MENA region and will feature over 1,800 exhibitors drawn from 60-plus countries. The 17^th edition of the fair will be held from June 10 to 12 at the Dubai International Exhibition and Convention Centre.

The event will have six product sections pertaining to Parts & Components; Electronics & Systems; Accessories & Customizing; Repair & Maintenance; Car Wash, Care & Reconditioning; and Tyres & Batteries.  The 2019 edition will have four new sub-sections of Agricultural Parts & Equipment; Body & Paint; Motorcycle Parts & Components; and Oils & Lubricants.

One of the key features will be the Innovation Zone, which will highlight the emerging new trends in the automotive aftermarket. The show will also have a dedicated area at the center of the show floor focusing on presentations and product showcases that will shape the regional and global automotive aftermarket.

Other features include the Truck Competence initiative, an area highlighting over 1,500 exhibitors belonging to the trucking sector, and featuring everything from truck parts and accessories, to workshop equipment, body repairs and care.  Another highlight of the show would be the  Automechanika Academy –  a series of seminars, presentations, and workshops about key issues and regulations affecting the automotive aftermarket, along with IMI CPD workshop certifications.