From automotive to mobility, the future of IoT for the car industry

By | 10 minute read | February 16, 2017

IBM Munich HQ

We joined IBM’s John Kitchingman, Vice President, Global Sales Leader for Automotive at Watson IoT’s Genius of Things event…

Looking back at some of the thought leadership IBM has published over the last few years, I noticed studies that examined how the auto industry would change. From both the product and business model perspective. It’s really exciting to see those changes playing out right in front of our eyes today.

Back in 2010, we developed our first study outlining how mobility services will become the new frontier for smarter transportation. We believed that auto companies had to establish their stake in this emerging opportunity, digitally integrating how people move around.

Cars will remain a key component of our transportation mosaic with connected and electrified vehicles playing a critical role in helping this new world of mobility take off. Today most automotive companies and those in other industries are investing heavily to add a variety of mobility offerings to their portfolio.

We have emphasized the importance of developing new ecosystems in order to transform the Internet of Things. And that especially applies to automotive, mobility, and how people move from place to place.

This is happening in all the places where IoT is at work: the home, the city, in transportation, healthcare and much more. All of this also raises important questions, about data ownership, monetization and business models as well as consumer relationships, privacy and trust.

Ecosystems are developed around the consumer’s experience with how they want to utilize mobility options.  Consumers have various preferences regarding the features and services they want to access.   These are often based on their digital maturity and lifecycle expectations.  Based on the desire for capabilities that enrich the vehicle experience.  Based on connected services that enrich the personal experience of getting around.  And based on a desire for new mobility models and alternative transportation modes.

The connected car and urban mobility

Nowhere is the challenge, and the opportunity, greater than with the connected car and urban mobility in particular. IoT-driven technologies are continuously bringing new options to consumers.

All of which means that the traditional boundaries of an industry like automotive are disappearing. In fact, from our Automotive 2025 study that we published recently, 73 percent of automotive executives we interviewed said that collaboration with other industries will become the centerpiece to their growth strategies.

Looking at the key initiatives from several of our clients we see a number of common strategic investment areas they are pursuing.


To start with, the connected vehicle is here and will continue be the catalyst for change.  They haven’t yet become the staple in consumer’s lives that they can’t do without, but new connected services are brought forth every day and that “killer app” is certainly coming.


Electrification continues to grow, even as oil prices stay low. And vehicles are moving rapidly toward autonomous driving.  Auto manufacturers and those outside the industry are enthusiastically piloting autonomous cars and trucks. And cars are enabled with more and more active safety features leading to greater automation to assist drivers.

Vehicle sharing

All this leads to enormous opportunities to share vehicles. This is changing dramatically as auto manufacturers are also becoming mobility providers.  These services are becoming the next competitive landscape.

On top of all this there are much greater investments in enhancing the customer experience.  From the buying process to in-vehicle to extra-vehicle, the experience in cars has strategic focus throughout the industry.

Everything is now underpinned with an emphasis on data analytics. By 2020, connected cars will generate 350 MB of data every minute they’re operating.  Video, audio, voice, text along with sensor data are all part of the foundation of information to be utilized.  And the ability to analyze this information efficiently is paramount.

The common theme running through all these strategies is digitization.  The world is, of course, digitizing across every aspect of our lives. The way cars are designed. The way they are made. And the way they are experienced by consumers.  Nearly every aspect of what it means to be a car company or an automotive supplier is being transformed by digital technology.

General Motors (GM), who earlier in the year purchased a Silicon Valley autonomous drive startup called Cruise Automation, also took a $500m stake in ride-sharing start-up Lyft.

Apple made an even larger investment of $1B USD in Chinese ride-sharing leader Deedee

Later in the year, the action got even bigger. Qualcomm, already investing heavily in automotive decided to buy NXP, the #1 producer of chips for the auto industry.

And then finally consumer electronics giant Samsung bought Harman, the leading provider of infotainment systems for premium vehicles.

We’ve not seen activity that stretches the industry boundaries like this before.  All of this primes the pump for innovation across this growing ecosystem to develop products and services faster, and to connect vehicles to the Internet of Things. All feeding performance and operational data back through the value chain.

As you know, IBM has a long history of working alongside the automotive industry. Combining innovation with industry expertise, and solving problems from the factory floor to the rubber on the road.

We have stories from our clients, positioned around three big outcomes that are enabled through IoT.

  • Operational Performance
  • New Customer Experiences
  • And New Business Models

Schaeffler AG and IoT and digitization

Schaeffler AG are using IoT and digitization to improve operational performance in their traditional manufacturing. They’re also re-positioning themselves in the automotive value chain by creating new value and services.

Their systems are bringing innovation to wind turbines, planes, trains and even bio-hybrid vehicles. Professor Peter Gutzmer, Deputy CEO and Chief Technology Office, explains that Schaeffler have four focus areas as the basis for their strategic direction:

  1. Eco-friendly drives:
    1. Optimised combustion engine
    2. Electric vehicles
    3. Industrial drives
  2. Urban mobility:
    1. Two-wheelers
    2. Inner-city railways
    3. Micro mobiles
  3. Inter-urban mobility:
    1. Rail vehicles
    2. Aircraft
    3. Off-highway
  4. Energy chain:
    1. Wind power
    2. Solar power
    3. Conventional power generation

When we consider the foundations of operational performance, we need to be able to verify and authenticate the movement of vehicle ownership and possession along with the parts that will go onto the vehicle. As we get closer to autonomous there will need to be integrity of critical parts and sub-assemblies as consumer must have absolute trust that the vehicle will operate safely. The vehicle’s lifecycle is long and its imperative to be able to reliably track everything.

We often talk about blockchain and how its keeping our food safer.  But how can blockchain help the automotive supply chain remove cost and improve parts integrity?

Bosch and blockchain

Bosch is world’s leading global automotive supplier about how they’re tackling the complexity of the global supply chain.

Dr. Josef Maichle, Head of Advanced Analytics at Bosch talked us through multiple business ideas benefiting from blockchain: from smart contracts and safeguarding to commercial transactions and processes.

To facilitate processes, blockchain could connect:

  • Manufacturing chain
  • Supply chain
  • Logistic chain
  • Warranty
  • Software integration

Blockchain is clearly a critical technology to tracking parts and processes through the supply chain and vehicle’s life.

As a result of cooperation between IBM and Bosch, blockchain solutions were implemented within just three months, with a small team. There is a high probability for productive use of PoC, and further use cases within Bosch are in evaluation:

  • „Logistic chain
  • „Sharing economy e.g. car/ebike sharing
  • Supply chain and parts authentication
  • Community-based parking
  • Health care

Mercedes-Benz and engineering

Engineering is the other key ingredient. Automotive companies have excelled at engineering for decades, but bringing engineering into the digital age becomes even more important today.

Mercedes-Benz can stake their claim as one of the early inventors of automobiles and are one of the biggest premium vehicle manufacturers. Once again they’re innovating, but now with a turn toward systems engineering.

Dr. Seigmar Haasis, CIO for Research and Development, Mercedes-Benz Cars at Daimler takes us through the functional prototype.

For current challenges in car development, the V-Model is more important than every, and the functional prototype is the backbone or Model-based systems engineering.


Within a complex environment, Mercedes-Benz Engineering IT leverages the digital transformation by means of seamless integrated methods and tools:

  • For the system development within the whole V-Model.
  • For the early digital evaluation of systems by means of the Functional Prototype.

Amongst others, the Functional Prototype supports the creation of the digital twin within the whole lifecycle of a car. Within the Functional Protorype, specifications are analyzed by IBM Watson technology for a consistent system model.

Automotive and user experience

If we net it all out, connected vehicles serve one of three functions. First to help the driver and occupants of the vehicle.  Secondly for the vehicle to be able to take care of itself.  And finally, for the vehicle to fit into the larger transportation system and work efficiently with other cars and infrastructure

The next target for automotive companies to elevate the user’s experience in cars is to develop vehicles that enable themselves. In helping to take care of drivers and occupants, vehicles will need to be self-integrating.  Capable of smoothly accommodating whatever devices people bring into cars with them.

They also need to be self-configuring, where they can take data from devices, the vehicle and information stored in the cloud to configure themselves to individual user’s preferences.

To take care of themselves, vehicles will be self-learning.  They will understand driving habits, determine how the driver is feeling emotionally and the depth of their overall skill, so that they can adjust themselves to keep their occupants safer and to drive more efficiently.

Cars will also need to be self-healing.  They will diagnose themselves and know when they need repairs and updates.  Vehicles are becoming more electric and software-driven making self-healing capabilities viable.

Vehicles must also fit into and help optimize the broader transportation system.  They will be self-socializing as vehicle social networks will share information about traffic, routing, accidents, weather conditions along with like vehicles sharing information about defects, recalls.  Vehicles may even share purely social information.

And, of course, vehicles are becoming more self-driving. This means automated driver assistance along with fully autonomous cars. And consumers agree.  Last year IBM published a global survey of 16,500 consumer from the top 16 automotive markets.  Consumers across all markets indicated substantial interest in self-enabling vehicles.

The underpinning of self-enabling vehicles is data.  Data-driven solutions remove the complexity of today’s human-machine interface with too many knobs, buttons and levers that limit the realization of IoT in connected cars.

Local Motors

Local Motors are not only working on a very exciting initiative, but they also represent some of the non-traditional auto industry disruptors that I referenced earlier.

Jay Rogers, co-Founder and CEO of Local Motors explains that transformation of a brand or product means going back to the drawing board. For Local Motors, it means co-creation and micro-manufacturing.

The complexities of high speed vehicles constrain innovation. However, DDM dramatically simplifies component composition, simplifying the supply chain and improving manufacturing efficiency. Low part count and lighter materials create significantly more energy efficient vehicles that are rapidly configurable for the latest advancements in vehicular technology.

Low-speed electric vehicles, meanwhile, will be the first fully autonomous vehicles to commercialise. Their upgradable design and hardware means they can:

  • Keep pace with rapid innovation
  • Allow companies to showcase technology
  • Evolve with autonomous systems
  • Respond to passenger and cargo needs

Watson IoT and automotive

We believe that our Watson IoT portfolio is the ideal set of solutions to realize the vision I’ve discussed above. Based on three key elements:

TRANSFORM: Pre-packaged solutions to grow your business with new services and business models.

SOLVE: Applications to improve business outcomes through connected operations and connected products. Our Continuous Engineering tools help engineers build smart, connected IoT products and managing them across their lifecycle that support business transformation.

And finally BUILD. The tools you need to create, modify, connect, manage, analyze, and secure IoT devices and data.

Our IoT for Automotive platform understands the vehicle through its sensors.

Our cognitive computing platform, Watson, offers a comprehensive system of capabilities that includes visual recognition. Language translation. Tone analyzer. Natural language interface. And we are building out Watson’s ability to analyze video and audio providing new dimensions to understanding how people behave and machines operate. Watson is key to understand the vehicle’s driver and occupants.

Finally, we’ve also made additional investments to build our AutoLAB.  This is IBM’s first joint investment between one our industries and Watson IoT to assemble a crack team of Automotive experts who can rapidly develop and prototype IoT solutions for our clients. Both our work at Local Motors and with BMW was initiated through our AutoLAB.

So, together TRANSFORM, SOLVE and BUILD offer an integrated suite of IoT solutions to help achieve your desired business goals. Sign up for an executive briefing now!