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Digital Transformation in The Auto Industry Fueled by C.A.S.E

The auto industry is undergoing a digital transformation fueled by C.A.S.E. (Connected, Autonomous, Shared, Electric). Auto companies are investing heavily in electric vehicles, autonomous driving technologies, and digital connectivity to cater to younger generations that prefer accessing vehicles through services rather than ownership. This transformation requires auto manufacturers to focus on emerging markets, engage in new service design approaches, ramp up digital technology R&D, form strategic partnerships, and invest in startups.

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Shashank Chheniya
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162 views5 pages

Digital Transformation in The Auto Industry Fueled by C.A.S.E

The auto industry is undergoing a digital transformation fueled by C.A.S.E. (Connected, Autonomous, Shared, Electric). Auto companies are investing heavily in electric vehicles, autonomous driving technologies, and digital connectivity to cater to younger generations that prefer accessing vehicles through services rather than ownership. This transformation requires auto manufacturers to focus on emerging markets, engage in new service design approaches, ramp up digital technology R&D, form strategic partnerships, and invest in startups.

Uploaded by

Shashank Chheniya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Digital Transformation in the

Auto Industry Fueled by


C.A.S.E.
1,000,000,000. Today there are 1 billion vehicles on the road, most of which are using
unoptimized and inefficient technologies. Auto companies have been making gasoline and
diesel engines for decades, largely focusing on four types of vehicles:
1. Conventional Gasoline engine-based
2. Hybrid Electric (having a gasoline engine and a battery-operated electric motor)
3. Plug-in Hybrid Electric
4. Electric

Yet the next generation does not want to buy cars. Instead, they would prefer to share or
rent them, signaling a monumental shift from car ownership to “car as a service.” This
change poses a very relevant question for companies like Volkswagen, Toyota, Renault-
Nissan, Hyundai-Kia, General Motors, Ford and Honda: how to navigate this radically
unpredictable marketplace? In the short- to medium-term, they need to continue to focus
on their core competencies – namely, making gas-engine vehicles. These core businesses
are generating cash that’s vital for the companies’ existence. But what next?

To cater to this next generation, auto companies are actively investing in digital
technologies. Recent research points to the automobile industry spending $225 billion
through 2023 on electric car technology, while spending on autonomous cars will grow $85
billion through 2025.
The Connected segment of Industry X.0 has brought many opportunities, from vehicle-
based technology to manufacturing. For example in connected cars, new technologies
include:

1. Navigation and Infotainment Systems. These are often a combination of Artificial


Intelligence-backed voice-enabled touchscreens, touchpads on the center console, and
touch-control buttons on the steering wheel.
2. Connect Mobile Apps. Driver’s smartphone apps have become an extension of the
connected car.
3. In-Car Electronics. Electromagnetic compatibility (EMC) vehicles have approximately 200
control units with two miles of wires.
4. MIMO (multiple input, multiple output) Antennas. Electric cars are equipped with antennas
for radio broadcasts, mobile communications, navigation, WLAN, Bluetooth etc.
5. Car-to-X (Transportation Infrastructure) Interface. Electric cars can now communicate
between vehicles and with the transportation infrastructure. This enables real-time
information to be relayed between and to cars within a certain vicinity. Similarly,
transportation infrastructure can broadcast information such as alerts or warnings to cars
within a specified area.

Connected trucks have also seen technology advancements, including:


1. Optimization. Applying the concept of connected cars, connected trucks enable
optimization of truck usage by monitoring the vehicle’s route and operations.
2. Maximizing Fleet. Leveraging the power of IOT, trucks, vans and cars transport 65 billion
parcels around the world, but 25% of delivery vehicles have spare capacity. Technology can
help overcome this challenge through geospatial analysis, Big Data, AI and Machine
Learning backed by powerful graphic processing unit computing power.
3. Capacity as a Service. Just-in-time capacity information available via a mobile marketplace
can help small businesses and entrepreneurs use this capacity to improve their business.

Technology investments can be seen well before these vehicles ever hit the road. Namely,
through a Connected Factory, often considered part of “Industrial IOT.” For example:

1. Intelligent Assets and Digital Twins. Auto manufacturers get a new level of asset
awareness. IT/OT Convergence enables asset utilization optimization. Replicating an asset
digitally allows manufacturers to virtualize assets. This digital-physical merging allows
companies to create digital twins, thus allowing OEMs to hasten their time to market by
leveraging digital twins during testing and certification.
2. Intelligent Workers. Smart wearables can help ensure the safety of workers and the work
environment while adhering to factory processes. Extended reality, meanwhile, can
provide on-the-job training, creating an efficient, right-skilled and smarter workforce.
3. Intelligent Supply Chain, Inventory and Warehouse. Real-time supply chain visibility, and
track-n-trace ensure end-to-end real-time visibility of parts and finished goods. RFID-
enabled smart labels also allow every part to be tracked from receiving and stocking to
picking, installation and inspection.

The Autonomous aspects of Industry X.0 have evolved considerably during the past several
years. Autonomous driving started with cruise control and automated parking but has now
graduated to autonomous driving on highways and cities. The Federal Statistical Office of
Germany states that more than 98% of traffic accidents in Germany are caused by humans,
while the U.S. National Highway Traffic Safety Administration (NHTSA) reports that 94% of
traffic accidents in the U.S. are caused by human error.

Autonomous vehicles leverage the power of deep learning and anticipating conditions and
events, therefore minimizing traffic accidents caused due to human error. Autonomous
vehicles can also enable increased productivity (as the driver can focus on other tasks),
relaxation or collaboration (driver and passenger working together).
Shared & Services is an intriguing aspect of Industry x.0. Research indicates that cars are
parked 95% of the time. This means people only use their cars for about an hour, which
makes car-sharing not only convenient, but something that makes perfect business sense.

Car-sharing is easily recognized, as car rides on-demand have been revolutionized and
entered the mainstream by Uber, Lyft, didi, Ola and FreeNow. Initiatives like car2go and
DriveNow are also gaining traction with millennials.

Services for Cars are broader in scope. Charge Now provides information on charging
stations globally, while parking on demand is enabled by numerous players after Smart
City initiatives began providing real-time availability of parking space. Companies like
ParkMobile, ParkNow and ParkMe are leaders in this space.

Other services include “tires as a service” through entities like Michelin Fleet Solutions,
which charges for tires by the mile, and usage-based insurance (UBI), a type of auto
insurance that tracks mileage and driving behaviors. The result has been the growth of
several UBI variations, including Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD),
Pay-As-You-Go, and Distance-Based Insurance. Indeed, Metromile charges per mile driven.

The fourth aspect of C.A.S.E. is Electric cars, trucks and buses. The adaption of electric cars
has been slow mainly due to the high cost of lithium-ion batteries. Another innovation is
fuel cell, wherein cold combustion, a chemical reaction between hydrogen and oxygen
creates energy to be used by the vehicle. To leverage the B2B space, various automakers
are focusing on making electric trucks and buses, the most noteworthy being Daimler
Trucks and BYD.
Next Steps for Auto Manufacturers

C.A.S.E. has bought forward an opportunity for auto manufacturers to rethink how they
manufacture and to account for consumer preferences and demand. To prepare for the
future, auto manufacturers need to:

1. Focus on emerging markets where more green filed innovation is taking place
2. Continuously engage in a very structured service design approach; the old model of
“selling” a car no longer works
3. Ramp up their R&D centers to focus on digital technologies and enablers.
4. Create strategic partnerships with system integrators to co-innovate and co-develop
outcome based digital transformation
5. Invest and/ or acquire startups

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