Four trends transforming the automotive Industry

The past two years have been incredibly difficult for the automotive industry. It’s no surprise then, that automotive manufacturers and suppliers are eager for 2022 to deliver them better fortunes. The year ahead promises a future of digital supply chains, digitally-enhanced experiences, pressure to prioritise sustainability and connected vehicles.

Players will realise the need for digital supply chain management

Industry-wide supply chains have come under strain over the last two years. However, the global automotive supply chain has been one of the hardest hit. With the industry lacking key materials and parts such as semiconductor chips, many factories have been forced to shut down. To face these challenges head on in the new year, companies need to have greater visibility of their supply chain. Better understanding, prediction, and collaboration are needed to identify and avoid bottlenecks as quickly as possible, and to solve the problem in the long term.

Digital twins—virtual representations of a company’s physical supply chain—are becoming increasingly popular as a way for businesses to simulate various aspects of their work. By bringing data from disparate sources into one place and modelling their entire supply chain, companies can get a more complete view of suppliers, inventories, and other information. For example, companies using Google Cloud’s Digital Supply Twin for better data gathering and sharing have achieved much faster analysis of supply chain data, with processes that previously took over two hours now being carried out in a matter of minutes. The supporting module, Supply Chain Pulse, provides real-time dashboards, advanced analytics, and flags up potential problems.

In 2022, we’ll see more use cases of companies leveraging digital twin supply chain management products as they help bridge gaps across systems and build greater understanding of the factors affecting supply chains, so businesses can adapt accordingly.

Vehicles will be designed to provide 360-degree experiences for customers

The automotive world is learning that it must meet customer demands for a digitally-enhanced experience along the entire lifecycle; from discovery, to purchase and finally, ownership. So, what happens when a customer can’t get to see a product in real life before purchasing? Through the power of the cloud, virtual and augmented reality enables customers to see and experience 3D car models without having to step foot in a car showroom. For the ultimate immersive purchasing experience, potential customers could sneak a 360-degree peek inside and out, and even try different colours of the model.

When it comes to ownership, automotive manufacturers are making progress closing the gap between a vehicle and its owner. Last June we wrote about the rise of “empathetic devices,” experience-driven machines that come off their manufacturing lines fully engineered, ready to go, and yet in a critical sense incomplete; they await interaction with their owners to exist fully as products. Since then, we’ve seen manufacturers designing products and customer experiences with this gap-closing cycle of learning built in. For example, with the Intelligent User Manual we built with Toyota, searching for car information is personalised to the car’s identification number, so that the car can explain itself to its owner via a voice-activated digital owner’s manual experience.

Through the power of the latest graphics and scalability of cloud technology, we’ll see the entire lifecycle of a vehicle taken to the next level.

Players will come under pressure to identify and act on the size of their carbon footprint, along with other sustainability issues

While sustainability has been on the agenda for automobile manufacturers for some time now, pressure is increasing from customers, business partners and shareholders who demand positive action. 2022 will see manufacturers increasingly under pressure to identify and act on the size of their carbon footprint, along with other sustainability issues. The gap between this fast-arising issue and manufacturers’ knowledge is being closed digitally, typically with powerful analytics and AI.

One of the most exciting things about AI is the way it’s increasingly able to model and act on large-scale systems. For example, we’re seeing huge gains in accuracy when it comes to quality control, meaning manufacturers can standardise and shrink the size of training sets needed to build models, and apply computer vision not just to individual parts, but to groups of parts, and eventually to the overall system. AI can also help mitigate problems with last-mile delivery, which account for more than half of all shipping costs. The ability to optimise routes using real-time weather and traffic data, as well as to deploy ML models to predict where new pickups are likely to come from, will enable companies to minimise operating time and expenses while maximising services.

This system view approach will be critical in addressing sustainability. Some years ago Google Cloud employed deep learning to cut the amount of energy used by our data centres by 40%. Companies like Renault are now closing gaps among manufacturing processes in even greater ways, creating more impressive system models.

AI will see a considerable uptick, specifically in the connected vehicle experience

We’re also closing the “pilot gap” in AI, which happens when companies pilot a project, but can’t profitably generate results at scale. Google Cloud’s multi-year agreement with Ford has many AI elements, and will involve bringing thousands more engineers into AI-based engineering.

The automotive industry has struggled this year, but the trends we see emerging in the new year will help companies see and optimise larger-scale systems in product creation, delivery, and use

Throughout history, technology can only deliver at scale when it solves for the human component, closing the training gap so that new tech can work in large markets. With Ford, we’re introducing enjoyable, safer and more efficient connected vehicle experiences built to minimise driver distraction and keep customers at the forefront of technology with over-the-air updates. Beginning in 2023, Ford and Lincoln customers globally will start to benefit from unique digital experiences built on top of the Android operating system and with Google apps and services built-in, which include world-class map and voice technology. The new data streams generated by the connected vehicle market will build the foundation for advances in vehicle technology such as autonomous driving and the software-defined vehicle.

The automotive industry has struggled this year, but the trends we see emerging in the new year will help companies see and optimise larger-scale systems in product creation, delivery, and use. We’ve no doubt that the industry will face new challenges, but that is the basis of progress. The companies that dive into digital supply chains, digitally-enhanced experiences, sustainability and connected vehicles will be best positioned to grow in the future.

About the author: Dominik Wee is Managing Director Global Automotive, Manufacturing and Energy at Google Cloud