Three business benefits of going digital in automotive sector

The automotive sector has been rapidly changing over the past two decades. The industry has seen steady improvements across manufacturing, efficiency and design, but digitalisation represents a step change.  Recent advances have given birth to rapid and disruptive innovations which have not only accelerated efficiency, but also improved the user experience—key areas in increasing ROI.

The automotive sector makes a significant contribution to trade; in the UK, for example, it is worth more than £100bn. However, customer preferences are changing rapidly. According to a 2021 report,  59% of young consumers are considering buying a car, up from 35% in 2020. There is also a shift in preference from offline to online. With the post-pandemic landscape fuelling a boost to digital, automotive businesses are scrambling to transform their operations.

The benefits of leveraging digitalisation are many and varied. For example, repair and maintenance can increase estimation accuracy, whereas automotive manufacturing can leverage better efficiency. The UK is currently experiencing a fuel crisis in part due to Brexit and resulting shortage of HGV drivers. This labour shortage has made it clear that automotive leaders should consider moving towards digital to avoid any further risks like these. Digitalisation may not necessarily eliminate the need for a large workforce but it can reduce the demand for labour.

Artificial intelligence in automotive repair and maintenance

The role of artificial intelligence (AI) in the automotive industry is not limited to self-driving and tracking; it has potentially greater scope in other areas such as vehicle repair and maintenance.

In previous years, people have solely relied on manual guides which state the same guidelines and instructions for everyone. However, it would be unrealistic to say that manual guides of vehicles can be appropriate for every vehicle. This is because different vehicles’ conditions can vary depending on how they are driven. The ongoing trend of sensors in vehicles is gaining popularity with the help of AI, as sensors drive the owner’s attention towards the system parts that need service.

In predictive maintenance the driver is informed about any possible fault in the vehicle before it occurs. This prediction is functioned via AI-enabled sensors which make an intelligent decision on the basis of the gained information. This can be hugely beneficial for commercial vehicles in transport which can avoid the risk of breakdown in the middle of the motorway causing delay to other motorists.

In vehicle repair, mechanics are leveraging AI-enabled tools to generate vehicle diagnosis reports at the time of vehicle service. With the accurate information gained from the data collected by sensors and AI-enabled tools, mechanics are better placed to see faults and provide recommendations. This process is not only cost efficient and time saving, but it also increases efficiency, vehicle time span and customer satisfaction.

Digitalisation in manufacturing

Digitalised factories enhance connectivity by increasing communication. This enables manufacturers to continuously improve the overall production. According to Capgemini, automotive manufacturers expect that 24% of the manufacturing plants will be smart factories by 2022. The research also reveals that smart factories could result in adding US$160bn in productivity gains to the global industry annually by 2023.

The digitalisation of manufacturing plants can reduce machine downtime by 20-35% and reduce plant maintenance costs by 15-25%. Installing sensors in manufacturing plants can provide automotive manufacturers with a range of benefits. One such example is the ability to predict future usage and diagnose defects. This enables manufacturing plants to be maintained in an effective manner resulting in reduced unplanned downtime.

Sensor-equipped technology can provide factories with greater accuracy and better quality in their stamping process. Any part of the vehicle is ineffective if not fed with an appropriate amount of material. Too little material may cause component tearing whereas excessive amounts can affect stability. Hence, it is imperative that material fed into the press needs to have an appropriate quantity. Sensors can automatically adjust the amount by measuring the force exerted on the blanks and adjusting the pressure by lowering or raising stamping dies. This can improve sustainability as the numbers of rejected parts are reduced.

Moreover, in automotive manufacturing plants, the use of AI-driven technology is widening. The systems can be used to schedule, manage workflows and identify defects in the components to be used in the vehicles. The increased accuracy improves productivity while reducing costs. On top of this, producing design digitally not only allows the manufacturers to make changes before the final design, but also offers a greater certainty using virtual reality.

Digital platforms: bridge to sales growth

The rise of the COVID-19 pandemic created a barrier between consumers and typical car sales which included visiting the dealer physically to negotiate and take test drives. The automotive industry was already slow in adopting digital best practices, however, the pandemic left no option other than moving towards digital solutions. During this time customer journeys went through radical change and saw a major shift towards digital.

In the UK, overall retail sales experienced four years’ worth of growth in the past 12 months. And this was no different for the automotive sector. According to a survey conducted by BCG Digital Ventures, the UK saw 38% of people buy a used car through an online portal over the last year. In physical showrooms, the paperwork at the time of car purchase is quite long especially when it comes to financing. By the virtue of online sales, UK car retailers can reduce the transaction time in the vehicle selling process by 75%, furthermore saving process costs up to 45%. In this sense, creating a digital option for customers to purchase a car can be beneficial for both consumers and retailers.

The automotive sector plays an indispensable role in the economy. With other sectors (e.g., finance, education, leisure and tourism) transforming their operations to digital, the automotive sector is falling in line. The industry was already experiencing digital growth but now it is crucial for all players in the space to be aware of the benefits that can be leveraged by moving towards digital. By investing in digital transformation now, automotive leaders can save costs, increase efficiency, leverage greater product quality, and achieve better ROI. And now in the wake of the pandemic, the adoption of the digital has become vital to stay competitive in the market.

About the author: Krzysztof Szabelski is Head of Technology at Future Processing