OEMs are sitting at a critical moment in automotive history – they will either take part in the greatest transformation ever or get left behind. Adoption will look different for every organization, but all will need to address the major trends driven by consumer preferences, technology, data, and climate concerns.
Overall, the most transformational trends are:
- Transition to EVs
- Mobility and ridesharing
- Handling the data from connected vehicles
- Addressing safety for autonomous vehicles
As we’re speaking with OEMs about these issues, we’re finding some trends in how the organizations are addressing them:
Paths to EV Transformation
There are two different tracks that OEMs are taking when it comes to electrification: one track is to begin selling EVs differently than their gas counterparts. As opposed to the in-person sales for ICE vehicles, EVs are configured, reserved, and ordered online. In certain states, OEMs can sell EVs directly to consumers online and deliver those vehicles to dealerships for pickup. The second track is to treat the EVs the same as gas vehicles, creating no distinction for how they are sold to customers.
Alongside these approaches to EV sales, dealer transformation is being altered by EVs as well. In many cases, dealerships need to be EV-certified, which requires charging stations, service bay makeovers, and ongoing training both in person and online.
Embracing Car Usership
When I was 16 years old, driving and owning a car was the primary goal in my life. Today, young folks in big cities don’t always want the expense of owning a car, let alone paying for parking. Modern lifestyles are demanding a different perspective on vehicles – ownership is transforming into usership. Drivers would rather pay to use a vehicle when they need it rather than invest in owning one, leading to the popularity of services like Uber and Lyft.
Subscriptions to vehicles is a new business model that some OEMs are exploring, opening new opportunities for consumers who desire flexibility in their car choices. For example, I can personally say that I’d love to have a convertible in summer months, but that vehicle choice would make no sense for Michigan winters. Usership would allow me to use the vehicle that makes the most sense for my situation at the moment, while ownership forces me to settle for a long-term choice that doesn’t address all my needs and desires.
Vehicle choice isn’t only affected by geography, either. Consumers want increased choices in terms of the vehicles that fit their current lives. Drivers can be single or married, parents or caring for parents, commuting long distances or working from home. These statuses are ever-changing, and many times they are unpredictable. Flexibility in vehicle choice allows drivers to have the car they need at the time they need it, and the opportunity to change direction as soon as needed.
Bulking Up Data Capabilities
Connected vehicle data is here, and it is about to be on steroids. I am glad we have such a talented data team because we will need them. When we speak to OEMs, we are always talking about data and how to monetize. The maturity of 5G is certainly a large part of that. As its footprint expands, vehicle-to-everything (V2X) and production at the pace of innovation are rapidly becoming a reality. The vehicle is becoming an element of the network and will benefit from all the information and applications that come with it.
For OEMs, this accelerated innovation is both a massive challenge and a game-changing opportunity. To be ready for the task, they’ll need to:
- Expertly manage the influx of data
- Strategize how to handle in-vehicle vs. outside-vehicle data
- Build home-streaming and infotainment
- Implement over-the-air (OTA) updates and services
- Plan vehicle data monetization
- Deliver V2X
Even without the addition of connected and autonomous vehicles, OEMs would benefit greatly from improved data capabilities. There are tons of opportunities to utilize data from consumers, creating the potential for impressive personalization of products and services if OEMs can organize and utilize the data properly.
“Autonomous” and “Safe” Go Hand-in-Hand
OEMs will find that 5G is the tipping point that accelerates customer journeys, and it begins with EVs and advanced driver assistance systems (ADAS). Many vehicles on the road today have driver assistance technologies which help to save lives and prevent injuries on our nation’s roads. While some driver assistance technologies are designed to warn you if you’re at risk of an impending crash, others are designed to take action to avoid a crash. Fully autonomous driving is the next stage of these technologies.
Among many other benefits, we are looking forward to real-time traffic optimization and vehicle-to-vehicle communication due to autonomous vehicles. These automotive technology advancements also have the potential to improve equity, air pollution, accessibility, and traffic congestion.
While there is huge potential for improved safety and traffic on our roads, autonomous driving has a negative reputation due to past accidents. The technology has not been completely realized, and other vehicles and infrastructure are not yet equipped with connected and autonomous capabilities. As a result, autonomous vehicles are still in early stages of innovation. OEMs are doing their part to break down the barriers of widespread concern for safety through considerable investment into safe testing, development, and validation of automated driving systems.
Pave the Way Forward in Automotive
Despite the trends we’re seeing at OEMs in response to industry changes, each organization has innovative ideas when it comes to EVs, connected and autonomous vehicles, and data management. At Perficient, we are working hard to support transformation in automotive so that the world of mobility serves everyone in the way they need it most.
Shift your transformation into high gear with Perficient’s automotive expertise.
