Navigating the Digital Highway
An unconfirmed story about Henry Ford traces the arc and progress of the automotive industry. During his interaction with salespersons at dealerships, Ford would tell his sales team to avoid selling variants of the Model T. He went so far as to suggest that the customer can have ‘any color as long as it is black.’ The industry has come a long way from ‘one size fits all’ to niche features and bespoke services.
This journey is accelerated by the confluence of advanced engineering and computing. The shift has become integrated with the digital lifestyle of vehicle owners/users and calls for automotive enterprises to become more responsive. Shifts in technology and demographics have helped make intuitive decisions, flexible value chains, autonomous operations, and self-service a business imperative.
However, the COVID-19 lockdown has imposed restrictions on mobility, ceased production, disrupted the automotive parts and components supply chain, and upended logistics. While this black swan event has jolted the industry, new vehicle owners will expect the purchase and driving experience to be as contactless as possible. The return to normalcy will alter the character of different automotive segments:
Connected vehicles. The social distancing imperative necessitates a smart, intuitive, and contactless driver/user experience. It will lead to the development of an ecosystem of connected services enabled by digital technology. Telematics enables dropping a connected vehicle at the service center, receiving updates about servicing, and making a payment without human intervention. Similarly, a connected vehicle can interface with drive-in takeaway restaurants, toll booths, and parking meters to offer a wide range of convenient services.
Electric vehicles. The electric vehicle (EV) industry is at an inflection point, being unable to become mainstream and realize its potential. EVs can gain traction only when several constituents function as enabling partners in this movement. Governments should encourage a low carbon environment with incentives such as long-term tax holidays for EV manufacturers, foster public-private partnerships in infrastructure for charging EVs and offer significant tax breaks for car buyers. On their part, EV manufacturers need to rationalize the opportunity cost of adoption, ensure superior price-to-performance ratio, better articulate the total cost of operations (TCO) proposition of an EV, and offer a rich bouquet of connected services to the digital generation of vehicle users.
Shared mobility. The pandemic poses existential questions about the viability of shared mobility. This segment needs to address the perception of health risks of human-to-human transmission and surface-level contamination. Ride-hailing service providers must sanitize their vehicles and certify them to be safe for travel. This segment may need to pivot to a model of convenient independent travel. For instance, a potential use case can be an on-demand service where vehicles are available at the location of the user, driven, and dropped off at the destination.
Autonomous vehicles. Social distancing norms in the aftermath of the pandemic make it conducive for autonomous vehicles to become the default mode of travel. It can make mobility more inclusive by attracting potential customers such as senior citizens and commuters who do not wish to drive. However, this segment needs to comply with stringent safety regulations to reassure customers that autonomous vehicles are safer to travel in than chauffeur-driven cars.
The history of locomotion in this millennium has been underlined by disruption. In the future, the state of the automotive industry will be characterized by the extent of digital capabilities incorporated into a smart automobile that is a veritable computer on wheels. As traditional automotive enterprises continue to be challenged by digital-first companies, they have to transform into ‘Live Enterprises’ -- organizations that respond and adapt to changes in the environment. The concept of the Live Enterprise and its analogy to living organisms is not new; what we have done is to take the concept and apply it to digital transformation. Live Enterprises are continuously sensing, responding, evolving, innovating, and always learning.
In this COVID-19 period, the Live Enterprise amplifies technology to make the user experience smarter as well as contactless. Such a sentient enterprise senses and responds to the situation, reimagines business processes and employee experiences, with automation, and drives hyper-productivity in a fluid operating model.
Hi Shridhar, It's very interesting! I will be happy to connect.
The connected car is going to be central to the mobility industries future. The ability to execute over the air updates and monitoring in an interconnected traffic grid will facilitate efficiencies and opportunities that are unimaginable today. A lot of the technology of tomorrow was technology of yesteryear just repackaged but the repackaging is what made the Model T and the iPod great! The OEMs, Dealers, Infrastructure providers and municipalities will all play a part and there is a lot of coordination that is needed still. Interms of propulsion I am a fan of electrification but until which time we have the hardened infrastructure to support mass electrificaiton the jury is still out. Don't get me wrong I like electric cars because of the simplicity and durability that can be offered, I just believe that we shouldn't cast a blind eye to only electrification. After all Natural Gas (38%) is the Number one fuel used in electrical generation with Coal in the number two spot 23% and nuclear in the number four spot with 20%. So before we start thumping our chests about how green electricity is we might want to visit some of the neighborhoods around natural gas wells, Coal fed power plants or roast some marshmallows around three mile island or Diablo Canyon. My point is that we need a national agenda and we need national coordination. The OEMs can't do it alone and if we want to have a smart transportation grid we need every traffic light maker and every highway sensor installer to have an set of rules that need to be followed nationally rather than by state or municipality. The Data that comes off of these smart highways will need to be made sense of and feed back in a loop so that we can maximize the efficiency of cars and trucks while minimizing traffic disruption. I can see Infosys playing a big role in that intelligence loop and look forward to hearing what your team is thinking in that area.