February 22, 2022 By: Chirag Pathak
As the COVID-19 crisis continues to evolve, the mobility industry must adapt quickly to the requirements of the new normal. The pandemic has driven changes in consumer behaviour, technology and regulatory trends which could have a lasting impact on the automotive landscape. Passengers are considering hygienic and safer modes of transport such as opting for private cars over shared rides. Social distancing norms have significantly reduced travel frequency through public transport. As the work from home model continues, the demand for e-hailing and taxis has considerably decreased. Recent McKinsey research has revealed that consumer spending on mobility services may decline by 40-50%, leading to a roughly 10% reduction in GDP. It may seem that the acceleration of future mobility has come to a halt, but this first impression overlooks recent developments due to changing consumer preferences, technologies, and regulations that will have a tremendous impact on mobility’s future.
Get Ready to Thrive in the World of ACES
Autonomous driving, connected cars, electrified vehicles and Shared mobility (ACES) is hot topics of discussion in the mobility space. Autonomous vehicles are driven by developments in new and innovative technologies such as augmented reality, artificial intelligence and smart navigation, requiring minimal to zero driver intervention. A new report by McKinsey & Company, predicts that by 2030, 15 percent of global automotive sales will be of fully autonomous cars, and the industry will continue to undergo massive technological changes.
Connected vehicles would be equipped with communication technologies to ensure (Vehicle-to-Vehicle V2V), roadside infrastructure (Vehicle-to-Infrastructure V2I) and cloud (V2C) communication. Electrified vehicles would leverage the latest technologies in battery charging and storage technology. Shared mobility has already been implemented that allows a passenger to share his/her cab with a stranger.
The key objectives for the paradigm shift from traditional mobility landscape to ACES include:
- Sustainability: The current mobility system poses severe sustainability challenges like air pollution, congestion, urban space deficiency. Electric vehicles drastically reduce energy-related CO2 emissions and limit global warming. Shared electric mobility helps in reducing traffic congestion and increases urban space. It meets the requirements of a city or a business without adding new vehicles.
- Safety: Autonomous systems enable blind-spot monitoring, road assistance, automatic emergency braking and adaptive cruise control that reduces the number of road accidents, making road travel and transport safer.
- Energy Improvement and Efficiency: Connectivity in vehicles enables data processing in the cloud that improves fleet efficiency. The use of machine learning (ML) in vehicles reduces dependence on high volume data connectivity to the cloud, thus improving energy efficiency.
- Cost Optimization: The cost of charging electric vehicles is less than gasoline-powered engines, hence reducing the cost of running and maintaining vehicles.
Impact of ACES in the Automotive Landscape
ACES vehicles are likely to impact customer loyalty that is primarily driven by appearance more than functionality and price. ACES vehicle’s design is driven by functionality and intended use. The focus of ACES vehicles would be their ability to withstand pressure, wear and damage. Automated shared vehicles would be light-weighting which is an important factor to enhance driving performance and meet fuel economy standards. The ACES vehicles will also help enhance passenger safety by significantly reducing human errors that lead to serious crashes.
Threats and Opportunities for the Automotive Industry
Pandemic caused manufacturing shutdowns, massive layoffs, disruption in supply-chain, chip (semiconductor) shortages, etc. However, chip shortage continues to remain a challenge for the players despite the post-pandemic recovery. The global automotive industry is evolving to adapt and accommodate radical changes in the business model. Automotive players are reinventing their organizations with digital technologies. The automobile sector is also facing threats like extensive competition among existing players, leaving little opportunity for new entrants. Constant fluctuations in fuel prices have significantly impacted the industry. The pandemic has led to sudden unemployment and macroeconomic uncertainty that daunts the automotive industry.
However, sometimes challenges are opportunities in the disguise. The industry can identify and utilize the opportunities for development such as changing customer preferences and shifting to cost and fuel-efficient transport. The mobility sector can use renewable sources to add value to the market. The demand for private vehicles is increasing with the change in consumer lifestyle and market expansion that would further enhance the demand.
Strategies to Master the New Automotive Mobility
Automotive companies have started implementing the following strategies to address the challenges and threats they face:
- Co-operate with OEMs in meeting both regulator and customer demand by ramping up Battery Electric Vehicle (BEV) portfolios.
- Risk evaluation by using intelligent systems and big data.
- Agile operation and configuring the risk response.
- Risk mitigation through risk mitigation workflows.
- Remain connected with suppliers and keep track of the market.
- Adopt IoT concepts to enhance efficiency. Leverage AI and analytics to improve overall equipment effectiveness (OEE).
- The use of digital twins in automotive production enables to plan the entire manufacturing process in a fully virtual environment. It also enables the optimization of each phase of the production process.
- For the burgeoning EV market, technology such as additive manufacturing can play a vital role in factors such as weight reduction.
- Make the supply chain flexible enough to exploit new market opportunities.
- For automobile companies, strategic alliances are a smart move. They can differentiate their offerings using specialized capabilities & partnerships with other companies.
- Stay connected with the customers through online channels.
ACES vehicles are creating new challenges and opportunities in the real world. Technologies such as Hyperautomation, AI, ML, additive manufacturing and IoT are the key for ACES that can improve user experience and enhance manufacturing and maintenance workflows.
Well, the future of automotive looks exciting but there are speed bumps ahead. Thus, automotive players need to be agile enough to respond to the dynamic changes. We at JK Tech, can help your business with cutting-edge automotive software solution offerings and leverage our expertise in digital transformation to meet your business requirements.
Are you ready for the digital automotive future? Connect Now.
