Disruption in the Automotive Industry

By Kelly Moore

The auto industry is undergoing unprecedented change. The standard 4-wheel + internal combustion engine vehicle is no more. Cars are becoming smarter, and consumers are demanding more from them. Mobility providers (Uber and Lyft), speciality Original Equipment Manufacturers (OEMs) (Tesla), and tech giants are increasing the competitiveness and complexity of the automotive market.

Faced with new entrants and disruptive business models, the auto industry and leading OEMs are evolving. OEMs are reimagining their products to keep up with the market and to change the role of the car in a consumer’s life. They are thinking beyond ‘the car’ and are looking to engage customers in new and elevated ways. In this process, some are outsourcing innovation and acquiring technology suppliers.

TribalScale is working with major international OEMs to create a new era of mobility. Harnessing our technical expertise, we’re developing products and working in emerging tech (AI, ML, and Voice connectivity) to enhance the connected auto experience, and to provide users with a unique, engaging, and safe in-vehicle journey. There are three major disruptions facing the auto industry: connected, autonomous, and service models.

Connectivity

Automotive does not exist in a vacuum and the expectation of connectivity extends to traditionally “dumb” devices. Globally, consumers are looking for advanced, connected vehicle solutions. What is a connected vehicle solution? Connected mobility enhances the driving experience through technology and in-vehicle devices that are connected to the driver, and to external devices and services. The connected car is able to optimize its own operations and maintenance, while delivering convenience and comfort to passengers.

Imagine: you turn on your car, your heat, and input your destination through the GPS, all well before you’re ready to step outside. While driving, you can use your voice to activate apps and services that will allow you to find and book parking at your destination, and you can seamlessly reply to emails. Your car is equipped with biometric sensors and will alert you if you fall asleep — perhaps eventually turning to automation. With advances in IoT technologies, your vehicle can be equipped and tied to city traffic and maps for real-time updates. The realm of possibility is growing, and the seamless connected vehicle experience is here.

Automation

Automated (self-driving) and autonomous (driverless) driving lie along a continuum of human intervention. Driverless cars are a bigger technical leap with little to no human interaction. An automated car will have a driver ready to take control in select cases.

Currently, cars can operate at Level 3 autonomy — find the scale here. With today’s automated cars, a driver is still required and is expected to intervene when requested, otherwise, the vehicle can control steering, (de)acceleration, and critical safety functions. However, with GM’s plans to release a vehicle without steering wheels or pedals, Level 4 autonomy is in reach.

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As a Service

We all know Uber, Lyft, car2go, and other ride-sharing and rental services have completely changed our relationship to cars and transport services — especially in cities. Plus, a study identifies a correlation in a decrease of car ownership with a rise in ride-sharing services. So what does this mean for OEMs? OEMs will shift to a transportation services model. Volvo started its Care program, which is a subscription plan for the Volvo XC4. Cadillac is expanding BOOK, its luxury vehicle subscription service. Some have also developed service-based businesses — think of Ford’s GoBike or Volkswagen’s MOIA — and others are likely to follow suit.

With each of these services, the aim is to shift away from the core-asset (a built vehicle), diversify, and explore new models that fit seamlessly with consumers busy lives. Through service business models, OEMs are responding to congestion needs, demands for clean energy efficiency, and opportunities presented by inter-connected infrastructure networks. But even more, they’re transcending the physical car their brand is tied too, and are reinforcing a connection with the consumer.

Each of the above innovation trends relies heavily on emerging technology. For OEMs to remain relevant and maintain customer loyalty, they need to adopt to the changes and build on their talent and their expertise. Many acquire, while many outsource innovation, but in either case, traditional manufacturers are vying for the latest and greatest as this industry undergoes rapid and fundamental change.

About the author

Kelly Moore is an Account Executive and Digital Transformation Partner at TribalScale. He is a car-enthusiast, and is looking to partner with OEMs and speciality manufacturers to help them transcend the traditional physical vehicle and create a new connection with their consumers.

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