Digital cars need digital automakers

By 2030, a majority of automakers predict that carmakers won’t be the ones making cars anymore. 62% say they will have significantly outsourced vehicle production operations to focus on digital competencies by then.

The shift to digital is all-encompassing—vehicles, corporate offices, manufacturing, and the customer model. But, a majority of digital transformations fail. Across industries, 71% of IT professionals agree that without hybrid cloud strategy it’s difficult to realize the full potential of a digital transformation.

Automakers have been trying to build a cloud foundation, but they’re struggling in three main areas. They’re not alone. Almost a third of cloud adopters report being stalled in the middle of their journeys.
 

Three areas where cloud computing can help automakers on their digital journeys:

1: Connected cars and software-defined vehicles

Vehicles today can have hundreds of millions of lines of software code. As the automotive industry continues to make cars that are increasingly digital, two domains have emerged—the connected vehicle and the software-defined vehicle (SDV). 

Challenges in this area include the volume of data, ensuring security and privacy, and integration challenges, but cloud’s robust infrastructure and hybrid data processing can help.

2: Connected manufacturing

Connected manufacturing uses a combination of edge and cloud computing to harness operational and business data to gain more value from improved processes and insights. However, only a quarter of manufacturing-related operations have migrated their data and workloads to the cloud.

Vehicle manufacturers face many challenges in this area, from the vast divide between information technology and operations technology, to volumes of data but few analytical insights, to a lack of standardization. Cloud-orchestrated automated workflows can help—and cloud can provide a much greater level of transparency for leaders and teams.

3: Direct to consumer: Transforming the customer relationship

As OEMs reinvent cars with technology, the automotive sales process undergoes its own changes. Automotive companies are diversifying from the legacy franchised sales model by adding direct-to-consumer, agency, and subscription sales models. They are also looking to diversify their digital revenue streams, moving away from relying on one-time vehicle purchases, and post-sale services. 

In a world where customers are frequently consuming multiple digital and physical products directly from an automotive brand, a hybrid cloud ecosystem is critical. 

From a disjointed customer experience to slow, uneven access to customer data, car manufacturers have their digital work cut out for them. Hybrid cloud can help them power better customer insights and an improved customer experience, as well as faster access to customer data.

All things digital begin with cloud

Cloud is the foundation for today’s digital technologies like generative AI, and what automakers will need when tomorrow’s technologies (hello, quantum computing) hit their stride. 

As automotive digital technology prowess becomes increasingly important to consumers, automakers need a solid but agile foundation to build upon—hybrid cloud provides just that. Given that automakers entered the cloud arena long before the competitive and consumer landscape look as they do today, now is the time to revisit their hybrid cloud strategy and upgrade for the future.

Download the report to learn more about how hybrid cloud can help today’s automakers become tomorrow’s digital automotive industry powerhouses.