Four tips to turbo-charge digital performance in the automotive industry

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Mumbai: The Capgemini Research Institute reveals top tips for automotive companies to fast track their journey towards digital mastery. Standing at its most critical juncture since the invention of the internal combustion engine, automotive leaders acknowledge the need to drive digital mastery by prioritizing customer experience, culture, operating models, connected cars, and open innovation.

Automotive lags behind other sectors in its digital transformation journey

  • Digital transformation in the automotive industry is complex, with fewer than 1/3 of automotive companies having the digital capabilities required for digital transformation.
  • Automotive companies are struggling to innovate their business models, only 28% of automotive companies have launched a new business based on digital technologies. Meanwhile, only 19% believe their digital platforms allow them to reach customers who would not be reached through traditional approaches.
  • Automotive companies struggle to develop the necessary leadership capabilities for digital transformation. Only 32% of automotive organizations agree that leadership actively promotes digital skills for development of employees.

Consumers expect a technology enabled experience

  • According to the report, to meet consumer expectations, automakers need to leverage AI and IoT technology. Nearly half of consumers (47%) say they prefer a mix of human and AI interactions when purchasing high-consideration products.
  • Only 33% of automotive organizations use analytics to personalize marketing communications. In comparison, 62% of consumers say that their purchase decision is likely to be influenced by social media.
  • 36% of consumers say their current car does not have connected car services which they would like in their next car.With brand heritage and driving experience losing value to digital features and autonomous cars, this will play a very important role, especially in post – purchase decision making, particularly in the premium segment

A digital culture can surpass traditional silos and a ‘center of excellence’ can help set directions and share learnings

  • Over six out of ten automotive respondents, (63%), including employees, managers and leadership, say that culture is the top hurdle to digital transformation. The same research also reveals a strong disconnect between leadership and the workforce when it comes to understanding what digital culture means.
    A digital center of excellence could accelerate the digital transformation and enable an automotive organization to develop the digital value chain so critically required but without the proper integration to traditional automotive business units it will inevitably fail to contribute.
    Fewer than 30% of automotive organizations have a digital unit or coordinate digital initiatives across silos, conversely nearly 70% of digital masters (across all industries) have a digital unit.

Build an open innovation platform for digital services

  • By providing a standardized and open digital platform for third-party contributors and partners, an automotive organization can increase its innovation capacity significantly.
  • Innovations, such as autonomous cars and mobility services, will further alter the relationship with the consumer. However, a common theme will be the in-car experience replacing the driving experience.
    39% of organizations globally (across all industries) have launched new businesses based on digital technologies. Unfortunately, this number drops to 28% for automotive firms.
  • Digital natives – such as Google, Apple, and the Chinese technology company, Baidu – understand that while autonomous cars might give them an entry point to the sector, digital platforms, along with apps and services, will establish their long-term staying power in the automotive industry.
  • With 45% of consumers saying they would like to be able to buy in-car apps and services (e.g. additional navigation features) online, open digital platforms will play a very critical role in addressing this gap.

“With digital business, we want to contribute to the operating result. Obviously, we need partners who can help us to realize our ambition, challenge us, provide knowledge as well as insights and bring strategies to life,” said Nils Wollny, Head – Digital Business, Strategy & Customer Experience, Audi AG.

“There is great potential for the physical retail to provide customers with a more enjoyable service experience, by using digital channels,” said Holger Suffel, VP – Global Service & Parts Operations, Daimler.

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