Digital Transformation of the Automotive Industry

Digital Transformation of the Automotive Industry

Digitalization Spending to Grow Rapidly to $82.01 Billion in 2020

RELEASE DATE
03-Mar-2017
REGION
North America
Research Code: K079-01-00-00-00
SKU: AU01443-NA-MR_19477

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Description

Research Scope

In 2015, automotive industry investments in key focus areas were about $19.57 billion. Growing digitalization and advancements in technology will increase the investments to $82.01 billion by 2020. The rapid pace of digitalization is transforming the component hardware-driven automotive sector to a software and solutions-focused industry, accelerated by consumers’ evolving digital lifestyle expectations and demands for new and innovative services.

The future roadmap of digitalization in the automotive industry is expected to move rapidly from “digital services” to “car-as-a-service” to “mobility-as-a-service”, transforming the car into an element of a connected living solution by 2030. In the year 2016, digitalization underpins the transformation of business activities, process improvements, and the development of new competencies and business models across five key pillars within the automotive industry.

•     Connected Supply Chain
•     Industrial Internet of Things and Industry 4.0
•     Connected and Autonomous Cars
•     Digital Retailing
•     Mobility as a Service (MaaS)

The study, Digital Transformation of the Automotive Industry, analyzes the strategies, growth analysis, competitive landscape, business models, and future focus areas of original equipment manufacturers (OEMs) and Tier I suppliers. Digitalization in the automotive industry will have a spiral effect on other industries. OEMs and Tier Is realized that digitization along with IoT, technology partnerships, software capabilities, and customized solutions will be the way forward for the global automotive industry from the year 2016 to 2025.

Growing digitalization initiatives and pilot projects with software-centric focus from automotive OEMs and Tier Is will increase automotive IT spending from $37.9 billion in 2015 to $168.8 billion by 2025 (at a CAGR of 16.1%). More than 1700 new digital startups are expected to disrupt the automotive industry supply chain.

In addition to OEMs, Tier I suppliers, and technology companies initiatives, this study covers a detailed list of startups and technology companies across the five key pillars.

Key Questions this Study will Answer

•     What are the key pillars of automotive digitalization? What are the key recommendations to automotive OEMs? Discuss case studies and initiatives from OEMs, Tier Is, technology companies, and startups focusing on digitalization.
•     What are the key markets for start-ups to venture into and what is the current revenue potential of those markets?
•     Who are the key participants and what are their unique service propositions (USPs)?
•     Considering automotive digitalization, how much will the automotive industry spend from technology and software perspective?
•     What are the opportunities for digital ecosystem participants (aftermarket, Tier Is, technology companies and OEMs)?

Table of Contents

Executive Summary—Key Findings

The Five Pillars of Digitalization in the Automotive Industry

Four Key Functional Areas Impacted by Digital Transformation

Investment in Digital Transformation in the Auto Industry

New Automotive Digital Ecosystem—Over 1700 new Digital Startups to Disrupt Industry Supply Chain

Snapshot of Major Automakers Investment and M&A Activity

IoT Platform for the Automotive Industry

Automotive OEMs—IoT Platforms

Automotive Digital Retailing—Vision 2020

What Digitizing the Retail Environment Enables

Automotive Industry Digitalization Underpins Aftermarket Evolution

Connected Cars and Autonomous Vehicles—Trends

Connected and Autonomous Cars—Growing Software Dependency

Data Monetization—Direct and Indirect Revenue Opportunities

Product as a Service—Connected Cars

Roadmap Towards Integrated Mobility is Digital

OEMs Moving Towards Car as a Service (CaaS)

Industry 4.0—The Four Functional Facets

Digitalization in Manufacturing—Automotive Industry 4.0 Approach

Conventional (Current ) vs. Digitized (Future) Supply Chain

Recommendations to Automotive OEMs

Research Scope and Objectives

Key Questions this Study will Answer

Research Background

Frost & Sullivan—CES 2017 Interviews

Research Methodology

Frost & Sullivan Digital Transformation Framework

Digital Transformation Framework—Digital Ecosystem

Digital Transformation Framework—Business Models

Digital Transformation Framework—Business Functions

Future of Automotive Retailing is Digital

New Customer Journey is Already Digital

Digital Solutions Supporting Individual Building Blocks

Degree of Digitalization in Car Retailing—2010 to 2020

Future Automotive Retail Ecosystem

Global Automotive Aftermarket eRetailing—Overview

Aftermarket eRetailing Penetration by 2022

Connected Supply Chain—Impact on Service Aftermarket

Digitalization Reshaping Leasing and Vehicle Financing

Gamification Leads to Next Level of User Engagement Models

Exhibit A—Rockar: Leader in Digital Retailing in Europe

Exhibit B—Rockar Hyundai: KPIs

Exhibit C—BMW’s eCommerce Strategy

Exhibit D—eCommerce in Automotive Aftermarket: BMW Web Store

Exhibit E—Mahindra KUV Launch Digital Marketing Highlights

Automotive Companies Unrealized Transportation Opportunities

Industry Drivers—On Demand Mobility Services

Mobility as a Service—Trends

Digital Transformation to Drive Integrated Mobility Platforms and Apps

New Business Models Underpinned by Technology

Mobility as a Service—Services, Business, and Pricing Models

Market Evolution of Vehicle Sharing Technologies

Digitalization Enabling the Shift to Car as a Service

Blockchain and Mobility Solutions

Exhibit F—Daimler Moving Towards Car as a Service

Exhibit G—MaaS Global’s Solutions “The Whim App”

Exhibit H—Technology Enabled Mobility Integration Platform

FordPass Platform—Parking Service to Autonomous Taxi Service

Mobility as a Service Market—2015 vs. 2025

Connected Car—Regional Trends and Highlights

Connected Cars & Technology Startups

Rollout of 5G from 2020 will Accelerate Digitalization of Vehicle

5G and Satellite Communication—Use Cases

Incremental Updates based on Navigation Data Standard (NDS)

Connected Living—The Alphabet Ecosystem

Smartphone Interfacing Technologies

Input HMI Related Trends—Displays and Touch Screens

Input HMI Related Trends—Voice & Handwriting Recognition

Output HMI Related Trends—HUD and Instrument Cluster Display

Key Developments in Voice Recognition

Automotive Industry—Rise of Automation

Natural Language Processing & Machine Learning for Self Driving Cars

Self Driving Technology Trends

Software and Self Learning Cars—2016 to 2025

Self Learning is not Autonomous—It is Beyond

Self Learning Technology—OEM Analysis

True Type Learning Algorithm Based Self Learning Car

Self Learning Revenue Opportunities

Re-thinking Automotive with Big Data

Autonomous Supply Chain—M&A Opportunity for OEMs & Tier Is

Industry 4.0 and the Automotive Industry

Industry 4.0 in Automotive Manufacturing

Big Data—Enhancing the Quest for a Lean Enterprise

Impact of Industry 4.0 on MES Platforms

MES Solutions—Automotive Industry

Future of Automotive Manufacturing

Industrial Robotics—Implications for Automotive Manufacturing

IIoT Driving a New Industrial Revolution Manufacturing

Cyber Security—The New Normal in Production Design

GM Digitalization Initiatives to Reduce Factory Downtime

BMW Approach for Digitalization of Production Facilities

Mercedes-Benz’s Approach to Connected Factory

General Electric—IIoT Platform Seems to be Most Preferred Solution

Future of Automotive Supply Chain—Connected Supply Chain

Automotive Supply Chain Network Architecture

Connected Supply Chain Network Features—2016 vs. 2018

Conventional (Current ) vs. Connected (Future) Auto Supply Chain

Conventional (Current ) vs. Connected (Future) Auto Supply Chain (continued)

Logistics Optimization

Total Supply Chain Management Cost—Potential for 25–50% Reduction

Supply Chain Operations Reference Level-1 Strategic Metrics

Supply Chain Operations Reference Level-1 Strategic Metrics (continued)

Supply Chain Operations Reference Level-1 Strategic Metrics (continued)

Automotive Cash to Cash (C2C) Cycle Time

Connected Supply Chain—Effectiveness and Efficiency

Measuring Connected Supply Chain Success

Automotive OEMs—IoT Platforms

Automotive OEMs Big Data Analytics Initiatives

Automotive OEMs Technology Initiatives

Automotive OEM Mobility Strategies

Digital Transformation Building Blocks—Ford

Business Models—Ford

Ford Mobility Experiments

Volkswagen Digital Lab and Enhanced Digital Platform

General Motors (GM)—Digital Transformation Elements

Future Digitalization of Service Technologies

Key Digital Initiatives by OEMs

Automotive Digital Transformation—Strategic Imperatives

Digital Transformation Solution Accelerators for Automotive Companies

Digitalization and Mobility Companies

Manufacturing—Connected Factory will Transform the Supply Chain

Connected Supply Chain and Enterprise Operations Ecosystem

Key Conclusions

Recommendations to Automotive OEMs

Legal Disclaimer

Product

Operations

People

Information Management

Customer Journey

Leadership

Market Engineering Methodology

Related Research
Research Scope In 2015, automotive industry investments in key focus areas were about $19.57 billion. Growing digitalization and advancements in technology will increase the investments to $82.01 billion by 2020. The rapid pace of digitalization is transforming the component hardware-driven automotive sector to a software and solutions-focused industry, accelerated by consumers’ evolving digital lifestyle expectations and demands for new and innovative services. The future roadmap of digitalization in the automotive industry is expected to move rapidly from “digital services” to “car-as-a-service” to “mobility-as-a-service”, transforming the car into an element of a connected living solution by 2030. In the year 2016, digitalization underpins the transformation of business activities, process improvements, and the development of new competencies and business models across five key pillars within the automotive industry. • Connected Supply Chain • Industrial Internet of Things and Industry 4.0 • Connected and Autonomous Cars • Digital Retailing • Mobility as a Service (MaaS) The study, Digital Transformation of the Automotive Industry, analyzes the strategies, growth analysis, competitive landscape, business models, and future focus areas of original equipment manufacturers (OEMs) and Tier I suppliers. Digitalization in the automotive industry will have a spiral effect on other industries. OEMs and Tier Is realized that digitization along with IoT, technology partnerships, software capabilities, and customized solutions will be the way forward for the global automotive industry from the year 2016 to 2025. Growing digitalization initiatives and pilot projects with software-centric focus from automotive OEMs and Tier Is will increase automotive IT spending from $37.9 billion in 2015 to $168.8 billion by 2025 (at a CAGR of 16.1%). More than 1700 new digital startups are expected to disrupt the automotive industry supply chain. In addition to OEMs, Tier I suppli
More Information
No Index No
Podcast No
Author Sriram Venkatraman
Industries Automotive
WIP Number K079-01-00-00-00
Is Prebook No
GPS Codes 9800-A6,9807-A6,9813-A6,9AA5-C1,9AF6-A6,9AF7-A6,9B07-C1