Unlocking Potential in a Changing Automotive Market: Part One
How can the automotive sector make smarter use of data to drive innovation and growth?
How can the automotive sector make smarter use of data to drive innovation and growth?
In part one of our three-part series, co-authored with global mobility leader Iveco Group, we explore the foundations of effective data strategies and their potential to transform the industry.
Embracing the Power of Data
The automotive market is experiencing a significant period of turmoil. While sector players know they must address the increasing market switch from product-focused to service-focused demand—including new market trends, such as connected cars — at the same time, they face continuous pressure around costs and efficiency gains. This includes increased competition and electric vehicle (EV) over-costs that are weighing heavily on automotive manufacturers and their suppliers.
In light of these challenges, automotive players are increasingly considering new opportunities to evolve and diversify their business models, with one trend being the expansion into the mobility services sector. By embracing this shift, these companies aim to meet the growing demand for mobility solutions over mere vehicle ownership, capitalizing on trends such as connected cars, shared mobility, and 'servitization’.
In this context, automotive players must find ways to differentiate their offering further, taking in the latest technology such as 5G and advanced analytics, while continuing to promote internal efficiency programs.
Bold actions are required to protect market share while building new competitive advantage. In this series of three articles, we explore the various business, technological, and data enablers that automotive companies can leverage to achieve this. Above all, the power of data takes on a central role.
By collaborating and sharing value with partners, companies can turn raw data into actionable intelligence, optimizing customer experiences. This includes businesses and their key partners; for example, dealers, parts providers, insurance companies, and charging service providers. They’ll also be joined by online platforms such as aggregators and digital marketers to build new competitive advantage, supported by the latest European Union (EU) guidelines on data sharing and data governance. We are already seeing that this intersection of data gathered from diverse sources can enable the development of genuinely innovative and customized services.
For example, automotive players can offer personalized insurance plans based on driving behavior data, or tailored services that optimize routes and schedules based on real-time traffic and usage data. Dealers or other automotive players can provide predictive maintenance alerts to customers.
In fact, dealers are an excellent example of a partner that plays a pivotal role in such an ecosystem, being the cornerstone of sales strategy. Automotive players should evaluate a dealer-centric model that promotes collaboration and mutual benefits to fully leverage the potential of shared data and consider the opportunity of integrating new sales channels/tools to capture specific client needs.
However, although the industrial goods industry has shown an increasing data maturity recently, driven by 5G advancements and the growth of Internet-of-Things, most players still struggle to extract value from data. They show significant gaps across most data capabilities, such as data governance, analytics, and use cases.
The journey to full value realization is multifaceted and articulated, but with the right approach it can be a major catalyst for business growth. Companies across the sector need to address their data operating model carefully, and a clear roadmap to reach the target state is critical.
