Comarch: Digitalisation is Reshaping the Automotive Industry
As of 2023, more than 70% of manufacturing companies had adopted some form of digital technology, such as IoT, AI and robotics, according to Deloitte.
Digitalisation, the conversion of analogue tools or processes into digital formats, in manufacturing has led to the replacing of manual assembly lines with industrial robots and the use of 3D design files over paper blueprints.
These technologies enhance efficiency, reduce unplanned downtime by up to 30% and increase productivity by 20%, according to the World Economic Forum.
This conversion enhances efficiency and streamlines workflows, by substituting legacy processes and methods for tech-powered solutions that are significantly more precise.
The impact of digitalisation goes far beyond the factory floor- it's improving customer relationships too.
Automotive showrooms have prominently embraced VR experiences, which allow potential buyers to explore different vehicle models and features without needing to enter the vehicle.
Digitalisation is also making purchasing a vehicle more convenient and personalised through optimised online purchasing processes and online vehicle configurations.
Digital transformation in the automotive industry
There are three main goals when it comes to the digitalisation of the automotive industry: reduce costs, improve efficiency and boost productivity.
Automation plays a key role in achieving these goals.
The implementation of industrial robots, for example, can free up people to carry out more complex tasks, as the repetitive elements of manufacturing such as welding or painting become automated.
Meanwhile, supply chain management tools such as generative AI can improve demand forecasting, automate inventory control and track data in real-time- all at a much quicker and more efficient rate than a person.
This means manufacturers can respond to market fluctuation and supply chain disruption much quicker.
It is not only the manufacturers and logistics professionals who benefit from this innovation, digitalisation creates new opportunities for superior customer service too.
Connected car technology can increase the appeal of an automotive offering to customers, including selling points such as data-based services which include real-time traffic alerts, in-car entertainment and personalised maintenance alerts.
These features make the ownership experience more engaging and rewarding for customers, providing a recurring revenue stream.
What are the advantages of digitalisation for automotive companies?
- Expanded market reach
Digitalisation has significantly expanded the market reach of automotive companies by enabling them to tap into global markets.
Through e-commerce platforms, online sales and digital marketing strategies, businesses can now connect with customers across different geographies, overcoming the limitations of traditional brick-and-mortar operations.
For instance, the global automotive e-commerce market is expected to reach over US$25bn by 2025, highlighting the potential for revenue growth through digital channels.
By diversifying their customer base, automotive companies can reduce their dependency on local markets and increase their resilience against regional economic downturns.
- Enhanced efficiency
Digitalisation enhances efficiency within automotive companies by automating repetitive tasks and streamlining operations.
Automation technologies, such as robotic process automation (RPA) and AI-driven tools, can take over mundane tasks on assembly lines, freeing up human workers to focus on more complex activities like design, innovation and quality control.
According to a McKinsey report, automotive companies that have embraced automation see up to a 30% improvement in productivity. These efficiency gains not only reduce operational costs but also enable faster production cycles, leading to quicker time-to-market for new vehicles.
- Superior customer experiences
Digital transformation in the automotive sector has revolutionised the customer experience, making it more personalised, efficient and engaging. Innovations such as online appointment scheduling, virtual showrooms, and real-time order tracking have made it easier for customers to interact with automotive companies.
A study by Salesforce revealed that 76% of customers expect companies to understand their needs and expectations, underscoring the importance of personalisation.
As automotive companies adopt more digital tools, they can offer tailored recommendations and services, which in turn fosters customer loyalty and boosts long-term sales.
- Data-based decision-making
Data-driven decision-making is a critical advantage of digitalisation for automotive companies, enabling them to optimise every aspect of their operations.
By analysing data from various sources, such as customer interactions, market trends and production processes, companies can make informed decisions that enhance performance and profitability. For example, data analytics can identify inefficiencies in the supply chain, predict maintenance needs and guide the development of new products.
A report by IBM found that organisations that leverage big data analytics achieve a 10% increase in productivity and a 5% reduction in costs, illustrating the tangible benefits of data-based strategies.
The benefits of digital transformation are clear, but there are also a range of challenges that come with this change.
Industry professionals can rely on vendors such as Comarch to make overcoming these challenges and implementing digitalisation easier.
Challenges of automation and digitalisation
- High investment costs: A significant amount of investment goes into implementing new infrastructure and technology. Employees have to be trained on new digital systems and new forms of software and machinery have to be acquired. Automotive companies need a dedicated budget to train and upskill their workforce in preparation for this.
- Data quality issues: Data must be clean, up-to-date and accurate to be useful. Poor quality data, such as faulty inventory records, hinders the effectiveness of automation and negatively impacts decision-making. Meanwhile, robust data governance practices and comprehensive management solutions must be deployed to ensure data integrity.
- Remaining competitive: Continuous innovation is essential to staying competitive. Automotive companies that are slow to adopt digital transformation risk falling behind competitors, who can subsequently provide speedier, more personalised services. This has lasting financial consequences and could result in a loss of market share.
- Sustainability: This must remain a priority when pursuing digital transformation. Lasting change is created through collaborative effort, so companies across industries must take their environmental responsibilities seriously. Automotive manufacturers can tackle it through energy-efficient technologies, reusing and recycling materials, or exploring alternative production methods that have a lesser impact on the planet.
Gearing up for the future
Automation and digitalisation will significantly enhance the competitiveness of the automotive industry both now and in the future.
By investing in emerging technologies such as EDI systems, prioritising data quality, integrating sustainable practices and upskilling the workforce, automotive companies can position themselves to thrive and prosper in an increasingly competitive market.
This strategic investment will lead to more personalised, efficient and environmentally responsible experiences for all stakeholders, including manufacturers, dealerships and car buyers.
The result will be a more resilient industry capable of adapting to evolving consumer demands and environmental regulations.
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