Mobile gadgets: how technology is transforming the automotive industry

Humanity has been making cars since the late 19th century. Then it was a "new industry" that brought such

revolutionary innovation as massproduction and conveyor. This revolution has been developing for over 100 years. Today, the polished vehicle that has been coveted for generations is backed by ore miners, metallurgists, oil rigs, plastics and rubber makers, a huge electronics industry, an army of parts makers, and finally the sales and service industry.

And now this whole colossus, covering dozens, ifnot hundreds of millions of people around the world, flew at full steam for a hundred years. The number of cars produced after World War II grew 17 times, and production centers, which were initially almost exclusively the United States and Western Europe, spread to all continents.

But it looks like the momentum of Ford's revolution has begunfade away when faced with something fundamentally new. Over the past 30 years, the auto industry has only partially been able to adapt to the process of digitalization of the economy, and has remained one of the most powerful bastions of the industrial society.

The revolution has no end?

Modern man is used to usingthe internet. First from a stationary computer, and then from a smartphone. At work or at home, he stays in touch. He can control things around him, automate processes and even began to get used to “intangible capitalism” by paying money for virtual goods and services - be it a movie, an application, or some additional features in a computer game. Even conservative government institutions in many countries have begun to develop online services.

And what about cars? Much of the successful consumer-centric digitalization has come through smartphones, which, while being able to navigate through an in-car screen or listen to podcasts with a stock audio system, remain external devices.

Consumers want their carsprovide the same level of digital functions and capabilities that they are accustomed to in their electronic devices. Can automakers provide this? Independently - no, and large IT companies will not agree to the role of ordinary suppliers. This is the starting point at which the stage of unpredictable development begins.

Many kings on the mountain

Automakers have always strived to stay onat the top of production chains. All services, all deliveries of spare parts - all this should be controlled as much as possible and be profitable. Now this is gradually becoming a thing of the past. To provide modern services, software and hardware manufacturers need access to vehicle systems - and they will have to be given it.

Plus, automakers will have toto receive more services from external suppliers, which means to share profits with them. This will enable companies to respond quickly to trends, technical developments, and changes in customer behavior. The digital transformation of the automotive ecosystem has already enabled a number of nontraditional tech companies to wedge themselves into different stages of the value chain. This is a growing problem for original equipment manufacturers (OEM) business models. The "pie" of the proceeds will have to be cut into more pieces. This raises a logical question: how to cut costs and generate more profit? Part of the solution is digitalization itself. Here are some of the models she offers.

After-sales service

While digitalization has the main effect onafter-sales service. This is what is already working today based on data collected by external telematics devices. They monitor important vehicle systems and determine the need for maintenance or repairs, which gives additional opportunities to attract a client to an authorized dealer's service station.

Data-driven predictive analyticstelematics enables car owners, both passenger cars and trucks, to save on repairs and maintenance. Predictive analytics systems (such as the solution from Verizon Connect) report problems early, avoiding serious disruptions to critical elements and systems.

By receiving data in a timely manner, stimulating the car enthusiast with discounts and promotions, the car dealer gets a significantly better customer return.

Google on wheels

The automotive industry generates more information than any other industry in the world. Needless to say, how expensive it is in the Big Data age.

Carmakers in partnership with IT companies cancollect information about cars and drivers. The first will allow them to produce them better, faster and cheaper and save money on reviews and warranty service. Based on such data, it will be possible to very accurately model and predict breakdowns, suggesting preventive repairs. The effect will be comparable only to the one that the introduction of scheduled maintenance once produced on the auto industry.

Driver data is even more interestingsource of profit. Where do the leading tech companies - Google, Facebook, etc., make money? First of all, on the fact that they collect information about users, help them find the goods and services they need faster and more efficiently, and at the same time provide an opportunity for manufacturers and suppliers of these goods and services to promote them in their ecosystem. In this sense, a car is the same Google, but it knows almost more about its user, and most importantly, it is much more tied to the material world, extending its influence to areas where Google has very limited access.

Studying the behavior of drivers, you can offer himnot only routes for avoiding traffic jams, but also directions for travel, visiting interesting places, shops, restaurants, gas stations and ad infinitum. This works in much the same way as music services, which offer users to listen to new tracks, selected based on their preferences.

Short cycle of use

There are prerequisites for the fact that becomingplatform for services, the car will lose its relevance faster, not because of the physical wear of parts, but because of obsolescence. As it happens today with smartphones.

The average life cycle of a vehicle will be associated withthe average life cycle of a number of consumer technologies. That could shorten the model's lifespan from the current five years to 12. But who can buy a new car that often? This will lead to the fact that the consumption pattern will shift from buying to long-term rental or auto-sharing. In this case, the car will become a rather expensive rental object, in the transparency of the use of which all parties involved in the transaction - the lessor, the insurer and the consumer - will be interested. The only known way to achieve such transparency without unnecessary waste is telematics.

Telematics perspectives

One of the elements of the above modelconsumption is already in use today - these are smart insurance services. In the West, they have already become the norm. There are many companies that monitor the parameters of driving a car in order to assess their risks when working with clients who, without telematics, simply would not have been able to sell insurance because of its high cost. For example, these are young drivers for whom there is no insurance history yet. If such a driver installs a telematics system that monitors his compliance with the terms of the contract, then he will be able to receive a significantly lower cost of insurance compared to that provided by traditional risk assessment methods.

In Russia, the penetration of smart insurance is still lower.but the technological approaches and solutions of Russian companies in this area are practically not inferior to those offered by our western colleagues. For many years we have been developing a universal telematics platform and, together with the largest insurance companies, car manufacturers and car dealers, have created an ecosystem around it, in which more and more services and opportunities appear for our customers: from round-the-clock monitoring of the condition of the car and protection against theft to the analysis of operational parameters, control cost and driving safety assessment. Now we already have more than 15 thousand connected cars in Russia and abroad, and their number continues to grow.

Now the main driver of growth is interestcustomers to security functions and smart insurance, that is, from their side - the opportunity to receive a discount when buying a CASCO policy. For corporate clients, the main incentive for introducing telematics is business optimization by improving control over the operation of the vehicle fleet, reducing the cost of servicing cars, eliminating downtime and monitoring safe behavior on the road for their drivers. Dealers and car manufacturers have recently been paying more and more attention to customer return at service stations and the collection of data on the operation of various vehicle components.

What is happening in the industry speaks in favor ofthat in the near future we expect a noticeable increase in the number of connected cars, including in our country. This growth will occur as new services are added to the ecosystems built around the car and will be one of the most visible signs of the digital revolution for the average car enthusiast.

See also:

A meteorite fell on an Indonesian house. Its owner became a millionaire

Neurons in the human brain and the network of galaxies are similar

Due to plate movement, the Pacific Ocean floor is now deep under China