Post written by:

Samuel Ropert

Smart Vertical practice leader

There was around 81 million connected automobiles in 2015. This market should, then, benefit significantly from the different regulations around the world promoting greater road safety.

On the infrastructure side, automotive is one of the leading industries to bet on the smart factory to optimise its internal processes, improve working conditions and, finally, increase productivity and make massive cost savings. The leaders are German automotive manufacturers, driven by the German Industrie 4.0 initiative, but new entrants like Tesla and LeEco are also building high-end factories.

On the products and services side, digitisation enables the connection of vehicles and the provision of such innovative applications as driver-related (telematics) and mobile Internet-like (infotainment) services. However, major question-marks remain around the real willingness to pay for such services as the smartphone is still the perfect substitute

The actual revolution is a bit further down the line. Indeed, self-driving vehicles will be at the ‘crossroads’ of various stakeholders’ strategies, and it is they which will represent the new battlefield. At the outset, the leaders will mainly be luxury car manufacturers. Nevertheless, the take-off of the self-driving car market -off faces numerous issues, which are currently either legal (who will handle accident responsibility?), or cultural (no real demand from end users) or financial (who will finance the infrastructure?).

Furthermore, customer loyalty will be impacted by the phenomenon of servicisation. Indeed, connectivity integration into cars will enable new services towards end clients. There will be car-related services such as predictive maintenance or even, in the near future, 3D-printed parts. Moreover, servicisation make it possible even to modify the consumption scheme itself, as it allows the introduction of a car-as-a-service model, which will potentially lead to the end of vehicle ownership. Leasing and car sharing are today gaining traction but the autonomous vehicle should reinforce this trend.

Finally, the process of digitisation will also shake up the current value chain in services.