Emerging trends and innovations within the automotive industry

Transformation in the automotive sector

In the contemporary world, innovations are rapidly changing every industry and everything in life, and the automotive industry is no exception. Innovations and adoptions are setting new trends in the century-old automotive ecosystem which are drastically different from what we used to know of and experience till now. There is nothing wrong in saying that the new vehicles will be more like a computer or smartphone on four wheels.

I would like to look at the emerging trends and innovations in the automotive segment from three perspectives; from the manufacturer angle, from the perspective of society, with a focus on the user or customer. We will just touch upon the other two before diving into the user aspect in detail. The young, tech-savvy generation look forward to a better user experience and that will drive the ongoing and emerging innovations in this sector. 

For manufacturers, it is about smart manufacturing employing digital and automation tools for production, marketing and selling. For example, additive manufacturing also referred to as 3D printing is a great source of product innovation that helps reduce production time and cost of production. Technology solutions like big data, analytics, blockchain and other Industry 4.0 tools are increasingly used by automotive manufacturers for effective marketing and selling, predictability and visibility in inventory, and supply chain with respect to suppliers and customers. 

The pace of modern production is staggering. Commenting on this, Ashutosh Padhi, a senior partner at McKinsey, says: “The automotive industry will see more disruption in the next ten years than it has seen in the last fifty years. And it’s not only about [the] head unit of a car. It’s also about [the] production process and its up to market time”.

Environment friendliness may arguably be the most important benefit of new trends and innovations in the automotive industry to the society by way of emissions reduction, bringing in orderliness on road, reducing accidents etc. 

We will focus more on the user or customer in this article. PwC has coined an acronym ‘eascy’ in one of its documents, which when expanded is electrified, autonomous, shared, connected and yearly updated. I feel this sums up the emerging trends and innovations in the automotive industry reasonably well. One of these elements that were rarely discussed elsewhere is Yearly Updated. We will, therefore, take the discussion forward on the line of ‘eascy’. 

Electrified or Electric Vehicle

The concept of electric vehicle has been there for some time with companies like Tesla making great strides in this segment. With the future of fossil fuel looking bleak, electric vehicles (EV) is the ideal answer to the fuel alternative and the world's environmental roadmap to zero-emission.    

However, EV per se is not the solution. This solution is not just by going electric because 90% of electricity in the world is produced using coal which only results in shifting pollution from one source to another. EV must be running on renewable energy sources like solar energy in order to meet this objective.  

Autonomous or Self - driving vehicles

This will be a game-changer. It will change the way we have been using automotive vehicles for about 100 years. Technologies like IoT, AI (Artificial Intelligence), AR (Augmented Reality) and other tools are leveraged to roll out autonomous vehicles, till recently seemed a utopian concept. 

Tesla, Google, Uber are playing a big role in making autonomous vehicles a reality. The autonomous vehicle market is estimated to grow at a fast pace and investments will likely continue to pour in, especially as further applications. This will completely redefine the use of individual mobility platforms. 

Shared Vehicles

Car-sharing and ride-hailing are two broad segments in a shared form of mobility. In both cases, vehicles don’t need a driver. However, the differences in terms of the business model is that while the car-sharing user chooses a particular product brand for a particular vehicle, the ride-hailing user is interested in a particular transport service. 

Though may not strictly come under this section of the discussion, CaaS (Car as a Service) is another trend emerging in the automotive ecosystem. CaaS is a subscription model which itself is an improvement on the already practised leasing model. However, the difference and advantage of CaaS are that the user has the flexibility to change or upgrade the car as and when they need it. 

Connected Vehicles

KPMG has named digitalization and connectivity among the key trends changing the future of driving. It seems that 5G technology will facilitate this, turning your car into a talking and thinking supercomputer quite soon. Cars will be able to create wireless networks to communicate with all traffic infrastructure, which includes vehicles and traffic lights. 

Networking of vehicles with the outside world is the concept of the Connected Car. It can be networking with other vehicles or with traffic systems or the vehicle occupants themselves with the outside world. This is where all kinds of new technology tools come together to play a pivotal role in creating a new and improved user experience.

Yearly Updated Vehicles

This is something common with mobile operating systems and apps though not necessarily on a yearly basis. The concepts of electrified, autonomous, connected and shared will lead to a rapid increase in the rate of innovation within the automotive industry. Model cycles of five to eight years will be a thing of the past in this sector. 

The range of models will be updated, say, annually in order to integrate the latest hardware and software developments to the existing models as is done in computers and smartphones. As customers can naturally not afford to buy a new vehicle every year due to the high purchase costs, the short innovation cycles will enter the market primarily through regular upgrades of existing vehicles. The tenure of Yearly is just a rough thought, it can be semi-annually or some other tenure.

These are not all. There are many other trends and innovations playing in this sector like fleet management and tracking management of transport vehicles in much improved ways. In the coming days, new trends and innovations hitherto unheard of or unthought-of would emerge to transform the sector further as in other sectors. 

#automotiveindustry #industry4.0 #innovationsinautomotiveindustry #trendsinautomotiveindustry #digitaltransformationinautomotiveindustry #businesstransformation #digital transformation #electricvehicles #autonomousvehicles #selfdrivingcars #business #entrepreneurs #startups #