The automotive industry is in massive transformation. From semi-automated driving to smart phone connectivity paired with blockchain solutions for transactional services – the rate of change of the modern vehicle is astonishing. Guiding this change is the rise of both the digital and sharing economies that have required automakers to reinvent and adapt to the new mainstream, or lose the race.
To get wider understanding of the pace of this transformation, and on how key reinventions are taking shape, Conduent visited the 42nd annual Automotive News World Congress that took place January 16 ¬– 17, 2018 at the Detroit Marriott Renaissance Center. We heard the most influential auto industry executives in the world share their ideas for the future of the automotive industry, as well as aspects on their organization’s transformative reinventions for 2018 and the future.
The key highlights of the event examined the topic of digital reinvention of the auto industry in several focus areas: hyper-personalization, electrified vehicles, connected software and platforms and cyber security considerations all throughout the supply chain from equipment manufacturing to user experience.
Reinventing customer service
“ The last best experience that anyone has anywhere becomes the minimum experience they want everywhere”, states IBM’s Sachin Lulla on the value and effect of hyper-personalization on consumers. Hyper-personalization isn’t a buzz word, but a way of life for today’s automakers in establishing deep bonds with the consumer. In Lulla’s view, this hinges on IBM’s partnerships in building solutions that improve faster transaction and processing solutions for the auto industry. An example is IBM’s recent partnership with ZF-TRW to form IBM Blockchain Platform that connects Car eWallet with IBM Hyperledger Fabric 1.0 to automate tolls, parking, car renting/sharing and eBattery charging transactions. Lulla admits IBM is capitalizing on a $1.5 trillion marketplace with this opportunity.
Lulla also showcased their recent partnership with Volkswagen – bringing an ecosystem of partners to deliver personalized experience inside and outside the vehicle called “We Commerce”. This digital service provides just-in-time recommendations to drivers at any time and any location. “We Commerce” delivers hyper-personalization by learning preferences and habits in order to make the best possible recommendations for drivers.
Britta Seeger, Chairwoman of Daimer AG, also added her view on hyper-personalization through their Mercedes Benz Mercedes Me app that helps drivers better understand their vehicles via managing maintenance scheduling, controlling vehicle components remotely, managing lease and financing and direct customer support all through the app. Their new Mercedes-Benz User Experience, or MBUX, infotainment system also enables car-sharing through the Mercedes Me app letting drivers share access to their vehicles.
Reinventing fuel efficiency
Improved fuel efficiency through electrification is where all bets are trending for many mainstream auto makers. Leaders such as General Motors and Daimler are investing billions in new electric vehicles over the next five years. Jim Hackett, President and CEO of Ford Motor Company announced planned investments of $11 billion in electric vehicles by 2022, starting with their most iconic vehicles to entice even their die hard and loyal customers.
Mike Jackson, CEO of AutoNation (one of the largest independent Dealers) outlined where the greatest demand for electrification resides – China, which has a current government mandate. He assured that US and EU is pivoting quickly to electric and away from diesel. To be sure, the trend is due to greater demands in improved fuel efficiency, lower prices for electric vehicle batteries and the success of Tesla’s electric SUVs and sedans.
Over the next 10 year, Jackson believes AutoNation and other dealers must compete in an EV market through differentiation and diversification by geography, brands, income streams and partnerships. AutoNation’s new partnership with Waymo, for example, will play a large role in the autonomous vehicle market. In fact, Waymo announced a multi-year service agreement with AutoNation as a way to expand their national footprint in supporting Fleet Services.
On the path to EV is Masahiro Moro, President of MAZDA US representing the “world’s first commercial gasoline engine to use compression ignition” with SkyActiv-X. This improved fuel efficient, eco-friendly system leverages the most of their existing technologies to maximize total performance. Moro highlighted the new revolutionary powerplant for the next-generation hybrid system by 2019, and sees SkyActiv as the foundation for how Mazda will enter the EV market down the road. But until then, Mazda will be maximizing their internal combustion engines for all its driving efficiencies.
Reinventing new business models
Business models and operational structures are changing quickly for automakers as cyber security threats challenge how traditional car equipment and software must now be made and function.
“Security is not one of these things that can be applied as a Band-Aid. It has to be dealt with at the root.” states Dr. Sandeep Chennakeshu, CEO/President of Blackberry. Chennakeshu discussed the cyber security challenges in the auto industry that center on the connected complexity and collection of technologies and inputs – connected phones; wireless; USB Ports – not to mention the increase frequency of cyber-attacks that grow each minute. Chennakeshu believes protecting a car’s security supply chain and the network of computer systems all throughout a car’s long lifecycle is their critical path forward.
Blackberry has answered this call with their latest Jarvis Platform for cyber security for the automotive sector. The solution protects vehicle access, transactional software and control systems and helps to define implementation strategies with key stakeholders such as OEMs and third party software supplier and others. This pay-as-you-go system, for example, is customized to interact with OEM and their entire software supply chain. With online access to Jarvis, “automakers can scan any number of binary files at every stage of software development. This includes the capability to evaluate new software under consideration as well as the ability to assess existing software already in production. Once scanned, development teams have immediate access to the results via user-friendly dashboards with specific cautions and advisories. In addition to cost and time savings, BlackBerry Jarvis helps ensure that production software adheres to industry standards such as MISRA and CERT, and enables OEMs to define custom rules to meet organization-specific objectives.”
With cyber security threats on the rise, the need for this solution in other industries such as healthcare, industrial automation, aerospace, and defense is paramount – and is yet another testament of the rapid changes driving today’s transformation of the modern vehicle.
Source: BlackBerry Launches Game Changing Cybersecurity Product: BlackBerry Jarvis press release January 15, 2018