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Automotive Digital Transformation Offers Opportunities, Says Frost & Sullivan

By Ken Briodagh April 04, 2017

IoT and technology research firm Frost & Sullivan has released a new report on Automotive Digital Transformation, and the company’s analysts say the report indicates that the opportunities are just beginning.

The automotive industry is facing unprecedented disruption, the report says, due in large part to more connected cars, Internet of Things (IoT), autonomous technologies, and the impact of smartphones on in-vehicle experience. Original equipment manufacturers (OEMs) and Tier 1 suppliers are making software investments to get ahead of the curve and strengthen their competitive positions.

“Digital Transformation of the Automotive Industry,” the recently released report from the Frost & Sullivan Future of Mobility Growth Partnership Service program, indicates that “digitalization spending” could drive the component hardware-driven automotive industry into focusing more on software and solutions for the foreseeable future. The study explores business activities, process improvements, and the development of competencies and business models in five strategic areas: connected supply chain, Industrial IoT (IIoT) and Industry 4.0, connected and autonomous cars, digital retailing, and mobility-as-a-service (MaaS).

“Digital transformation will affect the entire automotive value chain, including design, production, distribution and retail, reshaping the traditional automotive business model. New models will consider data, connectivity and customer centricity along with cybersecurity,” said Sriram Venkatraman, Mobility Senior Consultant, Frost & Sullivan. “As a result, the drivers of digital initiatives will change from CEOs, CIOs and the IT departments; by 2020, Chief Digital Officers will steer the strategic and digital initiatives of OEMs across luxury and economy brands.”

The report says that OEMs and tier 1 suppliers will seek partnerships with technology vendors and specialists for cloud computing, cybersecurity, telematics, connectivity and 3D printing solutions. It calls out Robert Bosch, Harman International, Continental, Magneti Marelli and Denso as suppliers that are investing on digital initiatives, while calling for OEMs such as Ford, GM, Tesla, Volkswagen and Toyota to prepare to compete with semiconductor manufacturers and mobility companies looking to enter the space.

“By 2030, the digitalization roadmap in the automotive industry will move from digital services to car-as-a-service (CaaS) to MaaS, making vehicles an element of a connected living solution,” said Venkatraman. “Automotive companies adopting custom digital initiatives after thorough analysis will be able to successfully leverage their software investments, access new markets, and easily adopt best practices.”




Edited by Alicia Young
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