Production, distribution and ownership will shape auto landscape

The consumer desire for intelligent products and services is everywhere, and the automotive industry is no exception. In fact, 43% of organisations expect more than 20% of their revenue to come from intelligent services in the next three years, indicating that the rise of the ‘Intelligent Industry’ will have far-reaching implications on the way enterprises run their businesses.

However, the automotive industry is set apart from other sectors because vehicles are so deeply engrained in the fabric of the consumer lifestyle. Changing the way that consumers think about driving will have a ripple effect that cannot fully be predicted—but that will surely alter society.

Since the beginning of the pandemic in 2020, automotive industry analysts, leaders, and experts have tried to predict what the state of this dynamic landscape will look like in 2030—EVs that will carry us to zero emissions, robotaxis whizzing around the roads, self-driving and connected vehicles changing the way drivers interact with their car—so much so that it is easy to get lost in the fanfare of “the future of the automotive industry.”

On a much more simplified level, the main themes that will drive the automotive landscape in 2030 are how the car gets made, distributed, and owned.

Shifts in automotive manufacturing and development

The first theme that will shift between now and 2030 is the way that vehicles are manufactured. Over the next several years, automated solutions will skyrocket, and many more OEMs will master how to effectively scale AI. For example, one major OEM has embedded AI into manufacturing for predictive maintenance, deploying a cloud-based image classification tool to detect component failures before they happen. Others have begun to toss around the idea of fully automated factories that will increase the efficiency of vehicle production.

In addition to automated solutions, sustainable supply chains will grow by implementing wireless, low latency, smart towers in manufacturing facilities, limiting supply chain risks and promoting the green future. Also, the automotive industry will continue its battery-oriented focus, which will result in the creation of gigafactories local to existing manufacturing facilities.

Finally, tighter integration of hardware and software will transform the relationship between OEMs and their Tier One suppliers, with OEMs figuring out ways to integrate Tier Ones earlier in the manufacturing process.

A new distribution model geared towards the consumer

As consumers continue to demand more personalised and convenient shopping experiences, OEMs will need to integrate more direct-to-consumer (D2C) commerce into their strategy. As existing laws that restrict the ways in which consumers can purchase vehicles begin to get repealed, the current dealer system will experience significant disruption. New automotive retail models will usher in changes in the buyer/seller relationship; for example, local OEM representatives and third parties providing service and support.

What’s further, as the industry evolves, the key players are going to change. Legacy automakers must evolve with their consumers to maintain trust and relationships. New entrants with experimental technologies will also break through to offer consumers fresh experiences that they have not seen before.

Creators of consumer digital ecosystem suites will look to form strategic partnerships to align with the demand for more holistic consumer vehicles. This will result in closer relationships between chipmakers, product developers, software companies, and artificial intelligence providers.

These changes all represent how automotive organisations must adapt, advance, and innovate to respond to new consumer demands.

Vehicle ownership for a digital lifestyle

Vehicles are deeply engrained in the fabric of daily life. As cars become more automated and advanced, they will soon operate as seamless devices in a digital world—essentially removing the distinction between what consumers can do at home or at the office and what they can do in their car.

Tighter integration of hardware and software will transform the relationship between OEMs and their Tier One suppliers

The introduction of infotainment, productivity technology, OEM-centric app portals, and more will connect the customer’s vehicle to other devices in their life—phone, tablets, etc.—as well as to their subscriptions and entire digital suite. This concept of a “smartphone on wheels” built on assisted driving capabilities will weave into the driver’s digital lifestyle and provide the time to complete other tasks on the go, without driving as a primary task.

Additionally, consumer demand for affordable EVs will grow. Consumers will want to charge EVs at home, use energy backup from vehicles in the event of extreme weather, and realise their unmet desires around electrification and affordability by having their vehicle as part of their at-home ecosystem.

What about new technologies?

In addition to these three pillars, there are hot new technologies that have garnered significant attention for their potential use-cases in the automotive industry. While some of these may not stand the test of time and fade as temporary buzzwords, there are several that have durability, and that will cause major disruption across the automotive sector.

Digital twins will be key for assessing the concept for a vehicle. Digital twins will have implications for data collection and monetisation; blockchain and self-sovereign identity; and there is a real case for the future of driver’s licenses and VIN numbers as affordable NFTs.

eVTOLS will begin to blur the line between aviation and automotive, impacting the last mile delivery and long-haul sectors. Ride-share and robotaxis offer a potential solution to the ongoing financial crisis (rising interest rates, car shortages, etc.), for those who wish to avoid purchasing a car in these times.

The future of any industry is always difficult to predict. As seen in recent years, mass disruption can happen at any time and can change the course of life as we know it. However, for any automotive industry expert, it is clear to see that this evolution will be ongoing and will have a ripple effect across many other sectors. Leaders looking to stay competitive in this changing landscape must realise that the future will be built on satisfying the customer—their growing need for personalisation, increased desire for sustainable products, digitally native lifestyle, and beyond.

While no one can fully predict what the automotive industry will look like in 2030, it is clear that mass transformation is already underway.

About the author: Daniel Davenport is Principal, Automotive, at Capgemini Americas