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Digital Transformation in the Automotive Industry

Seven FAQs of Digital Transformation in the Automotive Industry

Technology has overtaken many industries in the past decade. Taking a turn towards digital transformation in the automotive industry, it supports technology-driven trends, new customer demands, the internet of things (IoT), and new advances in artificial intelligence. The transformation mainly includes the product design process, manufacturing, maintenance, operations, and sales & marketing.

In the last 20 years, the competition in the automotive industry has drastically increased. The automotive industry has realized that it must meet consumer demands for a digitally enhanced experience which is more important for a car purchase. Customers are increasingly stringent in acquiring an advanced experience, and that's why digital transformation in the automotive industry is very essential.

This article brings you the FAQs that the automotive industry has undergone digitally. It helps you meet your business requirements. So, let's get started!

What is digital transformation in the automotive industry?

  • Just like any other business, the automotive industry is keen on digitizing its business in terms of data, connectivity, and cyber security with productivity and observability benefits.
  • Various technologies like process mining and deep learning enable this digitization including task learning and RPA.

Is digital transformation in the automotive industry necessary?

  • This industry holds tough competition for manufacturers and service providers, and at the same time, companies require a rapid change in the customer demands.
  • One cannot avoid digital transformation requirements to meet customer demands, improve customer experience, strengthen position in the market, and proceed in the competition.
  • Automobile dealerships use e-commerce to offer their products directly to customers. Whether automobiles, car components, or even accessories.


Explain a few examples of digital transformation in the automotive industry

  • Mercedes-Benz collaborated with the start-up Circular to measure emissions of climate-relevant pollutants and the quantity of secondary material used in the supply chain of battery cell manufacturers.
  • Cisco and Oxbotica, a worldwide autonomous vehicle software startup, collaborated to showcase an open roaming platform that allows autonomous fleets to share large amounts of data securely while on the road.
  • BMW’s Regensburg facility used an IoT platform to minimize deployment time by 80% and quality control concerns by 5%.
  • Volkswagen teamed with developers of augmented reality applications to designate car parts with the appropriate equipment used in the repair process. This technology is more efficient for technicians, known as MARTA.
  • Automotive paints and supplies are historically an offline business. PBE Jobbers Warehouse, an auto body equipment wholesaler, integrated its e-commerce, CRM, and ERP systems.


What are digital transformation benefits?

Digital transformation provides exclusive benefits for businesses such as:

  • Launching new digital-enabled services or businesses
  • Design of customer-centric products
  • Optimization of supply chains
  • Increasing productivity and decreasing operational costs
  • Improvement in quality management


Explain the key trends of digital transformation in the automotive industry

  • Environment: Environmental awareness and policies are made on climate change. So, customers look for environmentally friendly cars. Automotive companies are focusing on sustainable vehicles.
  • Connectivity:Several companies in the industry started to design and produce new cars with connectivity features. The cars must be able to:
  1. Connect to musical apps and social media.
  2. Have customized media content and navigation
  3. Provide digital assistance for driving
  4. Enable parking fees from the vehicle’s dashboard
  • Autonomous Driving: Self-driving technology is real and will be common in the future. Data from cameras and sensors are analyzed by advanced algorithms and allow customers to experience safe driving. Data privacy and cyber security are the challenges in this area. Autonomous cars are expected to have a 15% market share of passenger vehicles sold worldwide in 2030.
  • Digital car purchase: The never-ending procedures like exploring several models, going for test drives, the paperwork, and approvals almost came to an end. It became easy for customers to skip all the tiring procedures with the help of AR. The dealers employ salesmen and stock less inventory. Moreover, with online automotive spare parts solutions, customers don’t have to wait for their orders. They can book in advance and get it delivered to their doorstep easily.
  • Rise of Electric Vehicles: More vehicles=More emissions. Electric vehicles are gearing up and hopefully, this year will see a good rise in the demand for those. Customers are too conscious of the environment nowadays, and due to the rise in petrol and diesel costs, they wanted to go electric.


What are the challenges of digital transformation in the automotive industry?

  • Investment:Digital transformation investments must have significant capital. Return on investment (ROI) of these digitalization projects can be uncertain for some investments.
  • Impact analysis: It is difficult to have the expected benefits of digital transformation on business performance and objectives in a short time. This process can slow down new projects and investments in the automotive industry.
  • Data privacy: Many companies in the industry are collecting consumer, driver, and vehicle data to improve the features of vehicles and design new products and mobility services. Data security is something to be worked on just like other industries.


Impact of digital transformation on customer service

  • In 2022 lots of changes took place and clients of all kinds have gone online. Many sellers are trying their best to enhance the digital experience and interact with clients on social media or shopping apps.
  • Without a doubt, in the next five years, the automotive industry will experience the creation of a distinct digital, connected supply chain. It happens to be most vital for all stakeholders to digitally transform and manage the business by creating an intelligent and digital supply chain.
  • Due to the pandemic, demands for remote monitoring, control, and reporting have increased. The automobile industry is fortunate as the pandemic has subsided, resulting in an increase in income for the manufacturers since a large number of individuals were driving rather than flying. 



Interestingly, you see the technological developments in the automotive sector. The digital transformation in the automotive industry has pushed several customers to seek benefits and go environmentally friendly. Kuwy has been working on helping the customers achieve their motive of buying a new car most feasibly. Going digital, customers can easily choose their dream car with possible loan credits.


Looking to buy a car? Approach us! Let's go digital!

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Happy Learning!! 




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