Automotive

Global industry agenda


Automotive companies with the insights to understand the future will be the ones that can shape it.

Rapidly changing customer expectations, mobility ecosystem collaboration and new technologies are defining the automotive industry’s future. Success in the industry of tomorrow demands new, innovative business models, differentiated mobility experiences and a skilled workforce to support it.

Disruptive forces

Powerful global forces outside the control of any one company are compelling rapid change for the automotive industry.


Digital technologies

Redefining possibilities in the automotive industry, digital technologies will compound disruption and have hyper-exponential impact.


AI icon

Artificial intelligence

AI icon

Artificial intelligence

  • Advancing new business models and vehicle/services offerings
  • Serving as the engine for mobility learning and personalization

cloud icon

Cloud

cloud icon

Cloud

  • Enabling the industry to move beyond legacy
  • Mission critical for connected and autonomous vehicles

API icon

APIs/Microservices

API icon

APIs/Microservices

  • Enabling mobility partners to collaborate automatically
  • Opening the industry to external innovations

Cybersecurity icon

Cybersecurity

Cybersecurity icon

Cybersecurity

  • Embedding safeguards into vehicle systems and surfaces threats
  • Protecting consumer, employee and enterprise data

Blockchain icon

Blockchain

Blockchain icon

Blockchain

  • Increasing confidence in identity and persona management
  • Enabling transformational business model innovations

IoT icon

Internet of Things

IoT icon

Internet of Things

  • Equipping physical assets with digital data
  • Optimizing existing operational processes

Emerging consequences

Each manifestation of disruptive forces has the ability to shape a new future, and affect the industry, the enterprise and the market.


Number 1 graphic

Customer impacts

New auto retail experiences evolve

New auto retail experiences evolve


  • Consumers will prefer auto companies that offer alternative ownership options
    Access by BMW gives subscribers unrestricted access to a select portfolio of BMW vehicles for a monthly payment, including insurance, maintenance and roadside assistance
    13

  • Consumers embrace solutions that make better use of data for preferences and to personalize buying a vehicle
    By 2020, one in five vehicles will have some sort of connectivity that will easily allow a user to control all their devices, features and settings in the vehicle
    14

  • Traditional retail processes and providers will still be widely used for buying a vehicle
    Although buyers are becoming more comfortable researching, configuring and even buying vehicles online, physical dealers remain important, with buyers visiting dealers an average of 2.4 times during the purchasing process
    15

  • Non-traditional retail companies (such as Amazon) will begin to have a significant role in new vehicle selling
    On Singles Day, e-commerce giant Alibaba sold 100,000 vehicles on its Taobao and Tmall shopping platforms, which, according to the company, was equivalent to what 1,000 dealerships sell in a month
    16

Number 4 graphic

Enterprise impacts

The power of data propels forward

The power of data propels forward


  • Auto companies that capitalize on the power of data will lead
    The global revenue pool from vehicle monetization could be as high as USD 750 billion by 2030
    22

  • Data usage and ownership will be a battleground
    Over 41% of consumers believe that the owners/drivers of the vehicle are the sole owner of the vehicle/customer data
    23

  • Leaders will embrace digitization and cognitive to increase efficiency and reduce costs in their operations
    77% of Cognitive Innovators say they expect to implement cognitive systems within the next three years and 51% expect a 20% or higher return on their cognitive investment
    24

  • Analytics will be a critical enabler in connecting with the customer
    63% of auto executives say data analytics allow them to more accurately predict customer needs and desires, while 55% use analytics to gather greater feedback essential to product and service innovation
    25

Number 7 graphic

Ecosystem impacts

Winners partner extensively

Winners partner extensively


  • Companies that excel at the ability to partner and collaborate will lead
    Auto companies and new entrants are forging partnerships to capture the increasing mobility opportunity – GM invests USD 500 million in Lyft, GM buys Cruise for USD 1 billion, Fiat partners with Google, Ford acquires Saips, Uber buys Otto for USD 680 million 30

  • Intense competition, massive amount of startups
    Over 1,700 start-ups have emerged in 2016-2017 and are disrupting the automotive industry 31

  • Auto losers will be companies that don’t have a clear strategy for mobility
    VWs “TOGETHER – Strategy 2025” targets digitization and mobility as its foundation for future growth 32

Number 2 graphic

In-vehicle digital experience dominates

In-vehicle digital experience dominates


  • Consumers will want a seamless digital experience inside and outside the vehicle with a greater reliance on their virtual assistant
    Renault and startup CloudMade are creating My Driving Partner, an intuitive aid designed to help drivers improve their overall driving performance 17

  • Consumers will be willing to share their data but, at the same time, will demand greater control
    Globally, 75% of respondents are more willing to share personal data with brands they trust; 86% want to exercise greater control over the data companies have about them 18

  • Auto companies offer incentives and loyalty programs to entice consumers to opt-in to services and share data
    There has been an increase in the percentage of consumers willing to consciously grant access to their data (79% of globally surveyed customers in 2016, +11 percentage points versus 2015) 19

  • Auto companies are beginning to offer integrated solutions between home and vehicle to make better use of the time in the vehicle
    Mercedes launched a new service that allows customers with 2016 and 2017 models to communicate with their vehicles using Google Home or Amazon Echo; this follows the launch of similar services by automakers such as BMW, Ford and Genesis 20, 21

Number 3 graphic

New business models take hold

New business models take hold


  • Leaders will offer a complete mobility solution
    By 2030, almost 60% of the growing global population will live in cities; 40% of consumers are looking for integrated mobility solutions across multiple modes of transportation
    26

  • Leaders will implement new mobility business models, creating new revenue
    Driven by shared mobility, connectivity services and feature upgrades, new business models could expand automotive revenue pools by about 30%, adding up to USD 1.5 trillion in additional revenue potential in 2030
    27

  • Mobility services will grow significantly as auto traditionals will struggle to be relevant
    The race to build the Hyperloop could make future journeys – whether by plane, train or automobile – faster, comfier and cooler. Hyperloop One expects to have a working system in Dubai or another major city in 2020
    28

  • Cities versus rural as a route to market
    City type replaces country or region as the most relevant segmentation dimension that determines mobility behavior; in cities, shared mobility is a competitive value proposition while in urban areas, private ownership remains preferred
    29

Number 8 graphic

Next generation mobility platforms emerge

Next generation mobility platforms emerge


  • A company will emerge that provides an integrated journey across multiple modes (apps, services, data, monetary)
    World Economic Forum predicts multimodal integration will yield an aggregate benefit of USD 975 billion by 2025
    33

  • Auto companies will formalize relationships with ancillary industry companies
    73% of automotive enterprises consider collaborating with other industries as the top growth strategy in near future
    34

  • Artificial intelligence (AI) and natural language will dominate
    The automotive AI market valued at USD 782.9 million in 2017 is expected to reach USD 10.5 billion by 2025 growing at 38.46% CAGR
    35

  • The gap will be bridged between the home and the vehicle
    Amazon Alexa integration allows Ford owners to play and resume audiobooks, order items on Amazon, search for and transfer local destinations to the in-vehicle navigation system, and more. From home, Ford vehicle owners will be able to remote start, lock or unlock doors, and get vehicle information using voice commands
    36

Pressing challenges

Acknowledge and act upon industry challenges
in the near term to stay competitive.


The in-vehicle digital experience becomes the primary attribute consumers desire most

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The in-vehicle digital experience becomes the primary attribute consumers desire most


  • Experience configurability based on personal preferences
  • Consumers are willing to share their data but will demand greater control
  • Ability to learn and optimize to the occupants
  • Natural language will help to simplify digital complexity and become commonplace

Data-driven enterprises are winning

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Data-driven enterprises are winning


  • AI is being used to uncover insights previously unimaginable
  • Leading companies are protecting existing revenue streams while aggressively pursuing new ones
  • Data security, privacy and trust will become more prominent
  • Ecosystem partners are sharing data and insights to develop new products and services

Home, work, vehicle and life become one

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Home, work, vehicle and life become one


  • Connectivity to other smart devices – phone, fitness (wearables), appliances, home
  • Maintaining centrality of the vehicle and mobility data while leveraging other devices
  • Seamless transition between personal vehicle and other vehicle sharing platforms

Transformational opportunities

Technology-enabled opportunities to empower your organization
to address pressing challenges and compete in the marketplace.


Capture the individual – release the experience

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Capture the individual – release the experience


  • Develop dynamic digital personal personas to capture individual mobility information for extreme personalization
  • Use cognitive capabilities to combine personal information with vehicle usage and environmental information to learn, predict and optimize
  • Create a consistent experience across brands through digital personas

Exploit the data – reinvent the business

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Exploit the data – reinvent the business


  • Aggressively reinvent your business to enable new focus, experience and ways to work
  • Continuously uncover new data sources from all facets of the business, the vehicle, mobility services and the customer to gain new insights and opportunities
  • Obsessively share data and insights within your enterprise and across your ecosystem to co-create new business models and revenue streams

Bridge the gap – extend the value

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Bridge the gap – extend the value


  • Build an integration platform to link the vehicle to other aspects of a person’s life
  • Increase the value of a person’s mobility experiences by integrating vehicle usage data with other lifestyle-related IoT devices
  • Leverage digital assistants and other digital technologies to link known data with unknown future events

Start here to assess your readiness for
the future

Critical question 1

Customer experiences

  • In what ways are you capturing customer data to create exceptional mobility experiences and consistency when moving
    between vehicles?
  • How are you using AI in vehicles to learn and grow its knowledge about individuals for greater personalization?

Critical question 2

Enterprise reinvention

  • How are you finding new sources of data and the value that can be gained from them?
  • How are you sharing data and insights within your company and with others in your ecosystem to improve operations and create
    new opportunities?

Critical question 3

Ecosystem value

  • Are you creating initiatives to extend the value of mobility into the rest of your customers’ lifestyle events?
  • In what ways are you seeking out new, innovative partnerships in other industries to integrate between home, work, vehicle and life?

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