Auto Industry Is Saving Billions through Digital Transformation, Here’s How

Joining the ongoing digital revolution, the automotive industry is taking huge strides
forward. Auto companies certainly aren’t the only ones going full force with the
movement, but they are among those that are benefitting the most.

The auto industry is undergoing a complete digital transformation that is allowing them
to cut costs in virtually every facet of their business. What exactly have they been doing
to save such massive amounts of money and revolutionize the way they do business?

Here are some of the most significant ways that they’ve modified their approach to
embrace new technologies, and joined the digital transformation movement.

Autonomous Vehicles

Imagine a city-wide transportation system that all-but eliminates traffic accidents (the eighth most common cause of death worldwide). Autonomous vehicles can virtually
eliminate traffic deaths due to human error.

Although autonomous driving will take many years to become prevalent worldwide, the
gears are well in motion. Consumers stand to save an incredible amount of money, with
thousands and thousands of lives saved annually as well. Autonomous driving is the
future of transportation, and auto companies know it.

Auto Companies Will Sell Straight from Their Website

In the age of the internet, car dealerships aren’t entirely necessary anymore. Car
companies can now reach consumers directly, so you can expect to see more and more
doing so. Consumers know that skipping the middle man means lower prices, so auto
companies will accommodate those who prefer to buy directly from their website. At this point, it’s the natural path to take. Any resistance to it will eventually mean falling behind

Audi is a great example of a company taking advantage of the technology at hand and
using it to cut costs—even for their showrooms. In London, they’ve replaced some of
their models with giant video walls that display videos about their vehicles instead. With
fewer actual cars in the room, they were able to greatly reduce costs. We can expect
this to become common practice in the coming years.

Automatic Maintenance Alerts

Imagine being notified when your oil was getting low, or even when your windshield
wiper fluid was running out. That’s becoming the standard in the auto industry with
many companies already integrating detective maintenance. It helps to stop budding
issues before they end up costing a fortune. It also provides a safer journey for drivers,
virtually eliminating the risk of breakdowns, and creating a more dependable vehicle all
around. Less unanticipated malfunctions on the highway mean road trips will be much
less risky.

Michelin, for example, is already implementing advanced detective maintenance with a
tire monitoring system. In the future, this system will undoubtedly become standard
issue with many of their tires. Things like low tread and punctures will no longer go
undetected—and that’s just for one part of the vehicle.

Detective maintenance can also be installed in older models. The same analytics
software can be set up to allow certain car parts to self-diagnose. Cloud connectivity
can allow you to receive alerts straight to your smartphone. And since the problem will
have already been diagnosed, there’s much less guesswork involved.

Ride-Sharing Apps

Mobility as a service (MaaS) has already reshaped the way people think about getting
around. As a cheaper, more convenient alternative to traditional taxi services,
companies like Uber and Lyft have become household names. These companies have
actually discouraged consumers from owning their own vehicle—a major obstacle for
automotive companies.

So how can auto companies respond to such a threat? By getting in on the action. Fiat
is currently undergoing contract negotiations with Google for their own ride-sharing app.
Meanwhile, Volkswagen has already launched theirs. Although this may be a slight
departure from what these companies are used to, it’s a smart move. These are well-
known trusted brand names after all. Things should go smoothly for the auto
companies that jump on the MaaS bandwagon.

Secure User Data

Data security has become a major issue for many industries, and that certainly includes
automotive companies. Especially after GM was hacked and cyber-criminals took
control over a slew of vehicle functions, data security has been a high priority for auto

Among data-driven industries, the auto industry is ranked number two worldwide. Data
is collected by smart vehicles of all kinds that use the information they collect to curtail
the user’s driving experience to their needs. Smart vehicles now use a plethora of
different software to offer a customized driving experience. But this massive amount of
data being exchanged and stored must be protected. Vehicle manufacturers aim to
ensure that the smart vehicle revolution goes smoothly.

Next-Level Manufacturing Processes and Supply Chain Efficiency

Production has also been taken up a notch, with highly efficient digital processes being
implemented throughout. B2B transactions are quicker and easier than ever, with data
being stored instantaneously. Figures related to these transactions can be analyzed
automatically, saving time and manpower.

Feedback for smart factories can be obtained instantly through the Internet of Things
and social media. These smart factories use AI to replace certain human tasks, allowing
both robotic and human labor to be integrated into the production process. Workflow,
scheduling, and logistical duties can be carried out by software that uses algorithms to
determine the most advantageous outcome in a given situation.

These are just some of the ways that the auto industry is adopting a total digital
transformation. The results so far have been overwhelmingly positive, with billions of
dollars being saved. Production is more efficient than ever, and feedback is logged
automatically. Between autonomous vehicles and direct online sales to consumers, the
auto industry is poised for a very bright future thanks to digital transformation.


Siddhant Chaudhary

Sid is our Insight and Communications lead. He likes to consider himself as a chaos manager. When not found at his desk, Sid is usually away working remotely or outside longboarding in the parking lot.