The Future of the Automobile Industry
Author:CSC Town Hall
Automotive firms worldwide will roll out more than 80 million vehicles in 2013, and they are at the forefront of technology innovation – from vehicle technology to supply chain optimization, to product development and manufacturing, to aftermarket service and support. This Town Hall looks at trends in the automotive manufacturing industry and how cloud computing, big data, mobility and other technologies are combining to make this one of the most exciting times in the industry.
- Berthold Puchta, General Manager, Global Automotive, Industrial & Chemical Industries, CSC
- Christian Klöppel, Head of Mobile Business CoE, CSC
- Paul Scott, Head of Business Development, CSC
- Jeff Caruso, Senior Managing Editor, CSC
The Future of Automobile Manufacturing
When you buy a car you may be impressed by the technology that makes it safer, easier to use and more enjoyable to drive. There's even more going on behind the scenes. This CSC Town Hall examined how trends like cloud computing, big data and mobility are coming together to make this one of the most exciting times in the automobile industry.
Paul Scott, head of business development at CSC, says auto manufacturers enjoy global brand strength and worldwide networks. "The spare parts segment is very profitable, as are financial services. However, one of their primary weaknesses is the exploding cost of data management, including data on the office side and telematics data," Scott says.
Corralling that data and managing costs can help address another key weakness, Scott says. "With data in silos throughout the organization, we don't understand our customers well. One set of data will help us understand and engage them more effectively, especially this generation of digital natives."
Berthold Puchta, general manager of global automotive industries for CSC, says big data technologies in particular are creating vast new possibilities for cost reduction and new revenue streams throughout the industry.
"First, it's a race to determine who will own these revenue streams, whether it's Silicon Valley, the utilities or the manufacturers who theoretically own the relationship with the customer. The second aspect is all the patterns we can draw from the data that's being collected. I think at the moment, no one really has a clue how we will leverage it all," Puchta says.
Scott agrees and says there are immediate opportunities. "Big data can help us accelerate sales. Instead of waiting for customers to waltz in the door, we can identify customers based on their online behavior. We can identify correlating factors that influence what a person buys. For example, perhaps we will find that ladies who wear large hats purchase more expensive cars," Scott says.
"Another important way is in extending the relationship. After the first three years, customers begin to seek service beyond the dealer. Understanding how to keep a relationship with customers after that time will extend service and spare parts revenue," he says.
Mobility has already influenced customer expectations and preferences. Christian Kloeppel, head of CSC's Center of Excellence for mobile business, says it's a trend that shows no signs of abating.
"Mobile platforms are already widely used as a feature-rich communication tool, for search and navigation, and for entertainment. What's really interesting is using the smartphone as a telematics sensor, reporting a car's position, its speed. We can use it to scan the environment to gather information about surrounding devices or networks," Kloeppel says.
Linking that mobile device to the vehicle creates many more options. "We can see how much fuel is left, the condition of the brakes, when maintenance is needed. It can even be used as a car key, a driver's license or for applying personal settings in a car you rent. Clearly, cars are the next big platform for application developers," he says.
IT trends are helping manufacturers manage costs and making the manufacturing process more efficient. Puchta says moving applications to cloud computing is a big step. "Moving to an as-a-service platform helps manufacturers manage costs when demand goes down. The IT costs scale accordingly. It also helps OEMs manage peaks. When a new car is launched, everyone wants to go online to configure his or her car. Cloud computing can support sales mobilization processes and software development as well. Those things can occur in a public cloud. A cloud-based approach to IT helps automakers retain cash for better uses," Puchta says.
The Next Generation
Scott believes changing customer habits and expectations are causing manufacturers to rethink how they build and sell vehicles. "Cars must have a user experience that meets the expectations of the next generation, whether that's accessing Facebook, Twitter or other social media apps. But it extends well beyond that. We're working with an OEM to digitize the whole showroom experience, with stores in major cities where there are no physical cars, just large screens. It's an experience for the whole family, not just the car buyer," Scott says.
On the other hand, Kloeppel says that new levels of convenience in car sharing may mean that drivers won't feel the same need to purchase and own their own vehicle. "I can easily locate a cheap opportunity to get from A to B with a sharing service. I can jump aboard the car, start it and pay for my ride from a simple smart phone app. This level of integration into a mobile device is something which opens up totally new perspectives to younger people," he says.
As information technology grows in the design, production and operation of vehicles, so do concerns about security and privacy. Puchta says this is an area where CSC excels. "For over 50 years, we've worked with many government agencies to provide extremely secure solutions as a service and to protect critical digital assets. This is in our DNA. Cybersecurity is no longer in the backseat in the auto industry; it’s a core strategic element, especially as 'driving in the cloud,' our vision for the future of industry, becomes a reality," he says.
More questions remain to be answered with respect to what platforms and standards will be used to develop car-based IT systems, Kloeppel says. And will advancing technology lead us to the driverless car? "Before we address the technical challenges, my question is, 'Do we really want this?' Are people willing to hand over their safety to any kind of computer system?" he says.
Scott isn't ready for that. "I get a kick out of driving my car on the German Autobahn at 210 kph. The driving experience is very important for me. I'm not Generation Y, but I think the driving experience is something people still want."