By Joe Naberhaus, Commercial Business Group, Conduent
Welcome to 2017 – a year where disruptive technology, new business models and evolving consumer preferences will impact nearly every industry.
I recently attended the 2017 Automotive World Congress in Detroit and heard talks from some great minds: Wolfgang Duheimer, chairman and CEO of Bentley Motors; Tony Fadell, known as the father of the Apple iPod and iPhone and founder and former CEO of Nest; and William Clay Ford Jr., executive chairman of Ford Motor Company; and many other key speakers. These leaders opined on the future of their industry and the trends that are unquestionably going to shape it.
The audience perked up when industry experts addressed urban mobility trends, the complexity and significance of data aggregation and how analytics will impact ride sharing offerings. Another subject making a stir: the testing and the pending introduction of self-driving vehicles.
Here’s a few significant trends and takeaways to contemplate:
- Emerging Challenges for Automakers in the Age of Ride-sharing
It’s clear that the rise of ride sharing services, connected vehicles – and eventually self-driving vehicles – will simplify the lives of drivers and passengers. These disruptive forces, however, will challenge automakers to figure out where they fit in the changing landscape. Companies such as Ford, General Motors, Toyota and others will need to develop the right cars to meet these quickly changing consumer needs. Automakers will need to sell cars and provide services that “move people” as urbanization continues to spur new “transportation-as-a-service” alternatives.
Let’s take ride sharing: As people rely more on ride sharing services, the make, model or brand of the car will become essentially irrelevant. The fact that the consumer needs a “truck” of a certain size to help a friend move to a new apartment, or simply the closest car to take them home from a night out in the city, is about the extent of their preferences. It won’t matter if the vehicle that shows up is a Toyota, Honda or Ford.
Moreover, due to similar fuel efficiency requirements, cars and trucks have a similar look and feel. These trends reinforce the need for automakers to find new ways to create more brand awareness and cultivate solid customer relationships by offering new services, improving customer service and designing features that appeal to both riders and drivers.
- Addressing safety issues with data mining, analytics and machine learning:
17.5 million cars were sold in 2015. Yet more than 50 million were recalled in the same year, according to the National Highway Traffic Safety Administration. Given the sheer complexity of the average automobile today (with approximately 15,000 components) and increased scrutiny by regulators, recalls are here to stay.
So how to address it in a way that it enhances brand loyalty and reputation rather than hurt it?
Data mining, predictive analytics and machine learning can be used by auto engineers to spot defects more quickly and resolve them.
For example, sophisticated algorithms can automatically mine auto repair data and identify trends, giving automakers earlier warning of possible component and part issues. Also, if the industry could cooperatively share data with auto parts manufacturers, it would be possible to address issues early via design improvements before they become major recalls.
Going a step further, technology can be linked to customer care centers to enrich and strengthen on-going communications with the customer. This pro-active touch point with the customer could increase brand loyalty because of the proactive and positive way it’s handled. How’s that for turning lemons into lemonade? This continuing trend toward modernization demonstrates the foremost priority in the industry: advancing and improving the customer experience.
- Consumer choice will continue to rule while cities struggle to address infrastructure needs and the changing whims of commuters.
Not since Ford introduced the first mass produced car in 1913 has the transportation industry experienced so much change and disruption. Add to this, the changing priorities, and consumer purchasing habits among millennials that will impact automakers as well as city, state and federal transportation regulations. The big question is … what’s a city to do?
Cities simply cannot survive the growth expected without changing the transportation model. They will need help, in the form of new services and infrastructure that will ensure the vitality and livability of their city. To do so, cities will need partners, services and systems in place that allow real-time flexibility to meet the demand for more and more transportation options including shared mobility, autonomous vehicles, bike and ride sharing and dynamically changing parking, toll and roadway requirements – just to name a few.
Expect key partnerships to emerge between auto companies, city leaders, technology visionaries, urban planners, service providers and local communities to help cities meet their unique transportation challenges.
While change is sure to happen — one thing we can count on is we are in this together. With partnership, a spirit of cooperation and innovative thinking, we can turn this transportation revolution into an evolution.
Joe Naberhaus is chief innovation officer for the High-Tech, Industrial and Retail industries at Conduent. These automotive trends are essential to understand so we can help develop and provide solutions that ensure automakers, city managers and federal and state regulators are ready for these transportation advances.