Automobile Industry: the Approaches Influencing Manufacturers
There is fierce competition in the automotive industry. New buyer groups and outdated concepts for equipment are just a few examples of the kind of pressure manufacturers are under. Read on for a summary of specific approaches to modernization.
Digitalization is a challenge for the automotive industry. According to a study by ICT industry association Bitkom, skepticism has actually grown. Of those surveyed, 10% consider digitalization to pose a risk to their own company, although the overwhelming majority of 88% see it more as bringing new opportunities. “Companies have little choice but to embrace digitalization, particularly in the number one car nation,” said Bitkom President Achim Berg.
Even consulting firm Accenture recognizes that the automobile industry has a lot of catching up to do because manufacturers have not invested enough in digital technologies. Artificial intelligence, in particular, will become a key technology in the future – for example, in assistance systems or in relation to entertainment.
There are definitely signs of improvement. Harald Krüger, chairman of the Board of Management of BMW AG, explained for instance that his company invests not only in electric cars, but also in future technologies, such as autonomous and connected driving. Internally, BMW is implementing a fundamental reorganization: in-house start-ups are intended to ensure increased agility and flexibility and, as such, drive innovation.
Other manufacturers are also taking similar approaches. The extremely competitive German automobile industry has recognized that the old maxim of “the strong man is strongest when alone” will no longer work against its new competitors, the likes of Tesla and Google. Instead, ecosystem-based cooperation is called for to meet the demands of digitalization.
Daimler, in particular, considers itself a driving force behind digital transformation: “I believe we were the first OEM to really understand digitalization. Car-sharing service car2go was launched back in 2007, for example. And then think about services such as myTaxi, moovel, Hailo and Blacklane. Or local services like SSBFLEX or Berlkoenig and investments in Careem or Volocopter. But back to the automotive sector. MBUX is really leading the way in this respect. The system has digitalized the entire cockpit in our vehicles and usefully linked them for the driver. There’s currently nothing comparable on offer from other manufacturers and we’re very proud of this fact. However, it also shows that digitalization is well under way in the automobile industry – and has been for over 10 years now. Progress like we’re experiencing now is often much slower in other areas of development“, said Sascha Pallenberg, head of Digital Transformation at Daimler AG.
Says much about how this game is changing that evaluating a new car on a launch is as much about learning a new tech interface as it is driving. Indeed, much of what I have learned about the new A-Class has been done while parked. MBUX a big deal @MercedesBenzUK @MercedesBenz_PR pic.twitter.com/xF7qQwWNfH
— Dan Trent (@trent_dan) 8. Juni 2018
(Source: Dan Trent via Twitter)
BMW, Daimler, Ford and Volkswagen have joined forces to establish a joint venture called Ionity to build a network of charging stations that can charge electric car batteries at a rate much faster than previous systems. One hundred of these fast charging stations are being built this year alone. Google Maps is now able to display the locations of these charging stations.
Fast charging is also on the cards at Porsche. In 2019, the Porsche Taycan is expected to charge to 80% within 15 minutes, so the charging process should not take longer than a normal filling station stop with a coffee break. At 600 hp, the electric Porsche Taycan will be the new top-of-the-range model and is reported to accelerate from 0 to 100 km/h in 3.5 seconds. The entry level price will be around €75,000 according to Auto Bild.
Another important technology for the automotive industry is blockchain. Alongside Berlin-based foundation IOTA, Volkswagen, BMW and Bosch hosted the Blockchained Mobility Hackathon in Munich. They want to create a collaborative and open infrastructure to encompass car-sharing, bike-sharing, buses, trams, trains, taxis, private cars and, in the future, autonomous vehicles and even air taxis.
Focus on IT Staff
The examples mentioned here confirm that there are ways to modernize the automobile industry. However, the German market is still undergoing modernization at a relatively sluggish pace. Leading lights such as Audi, BMW and Mercedes-Benz are already investing a lot, in terms of both time and staff with digital expertise. This is perhaps the key factor: manufacturers would do well to invest not only in technology, but also in the necessary staff. Like in many other industries, IT specialists are essential for developing solutions in the automotive sector, but also for creating a clear strategy for all departments involved, such as marketing, sales and production.
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