IBM: Auto brands facing ‘digital revolution’
According to the study – Automotive 2030: Racing toward a digital future – in the next 10 years as consumers move from vehicle ownership to vehicle usage, 48% of consumers surveyed say that a vehicle’s brand would not matter as long as the vehicle is cost effective and convenient to access. To address this, executives in the automotive industry say that the ability of a vehicle to learn about its occupants, integrate with their devices, and have a natural conversation with them will lead to greater brand eminence and loyalty.
“Around the world, automakers are preparing for an industry in which less then 50 percent consider their brand to be a competitive differentiator,” says Ben Stanley, Global Automotive Research Lead – Institute for Business Value, IBM. “In the next decade, as cars evolve into networked machines dominated by software, the concept of an auto brand may be facing a digital revolution that will require prioritizing in-vehicle digital experiences over driving features to separate from the pack.”
Half of the surveyed automotive execs say that to succeed or even survive in the next ten years, they need to reinvent their organizations with digital technologies, supported by data. This data can fuel everything from operational efficiencies to new business models to the consumer-facing digital experiences such as integration with other personal devices, personalized services, and the ability to connect into other aspects of a person’s life. Yet, the study finds, only 18% of those responding say they are operating on a digital data platform today.
“Digital reinvention will power the automotive industry towards autonomous, connected, electrified, and shared vehicles built on diverse platform ecosystems,” says Dirk Wollschläger, General Manager Global Automotive, Aerospace & Defense Industries, IBM. “These ecosystems will be a mixture of technical, agile, high-performance companies from multiple industries, each bringing their own specialization and value to the mix.”
As the auto industry begins to build and inhabit digital ecosystems, the study finds, it may also face new workforce challenges: when vehicles deliver personalized digital experiences and AI and autonomy are standard features, automakers must possess the critical new skills that will remake their workforce – currently over eight million people – from top to bottom. The industry, says the study, will need to spend over $33 billion in the next 10 years to bring them up to digital speed. To achieve this, executives expect training and reskilling budgets will drastically increase.
For the study, IBM surveyed 1,500 automotive executives globally to determine what external influences are impacting the automotive industry today, and how they will change the auto ecosystem in the next ten years. Developed by the company’s business research organization – the IBM Institute for Business Value – the Automotive 2030 study also surveyed over 11,500 consumers to better understand what they expect from mobile digital experiences.
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