Why the Automotive Industry needs a Digital Transformation
Digital technology has taken the world by storm. Leaders in most industries agree that the role of digital technology is moving from being a driver of marginal efficiency to an enabler of innovation and disruption in the current way of doing things. It is one of the biggest drivers of transformation. It gives us an opportunity to shape our future.
These technological changes have brought about huge transformations across multiple aspects of the business. Be it manufacturing, marketing, or customer relations, digital technology has reformed them all. Companies across all sectors are trying to come to terms with the strategic implications of these transformations. Every company has to adapt to the new opportunities arising from the latest developments and trends from the digitalization of business. This includes the automotive industry as well. What is the importance of digital transformation in the Automotive Industry? Digitalization plays a very important role in everything from automotive manufacturing to automotive marketing. It equips the manufacturers with the necessary technologies and helps them remain flexible and relevant in this
Here are 3 reasons why the automotive industry requires a digital transformation:
1. Changing customer expectations
Technology is becoming ubiquitous and accessible to the wider population. This has a profound impact on the way the customers behave and the expectations they have. New age consumers are eager for speed, convenience, and innovation. If a company cannot provide them that through its products and services, it is going to lose its business.
With an exponential increase in consumer demand for value-added vehicles, latest specs, fast service, and loyalty-inducing marketing, the automotive industry is facing a lot of pressure in coming up with the changing requirements and preferences, while remaining profitable and operational which is one of the benefits of digital transformation and one of the main reasons why it’s important.
2. Unprecedented access to global markets
Digital Technology has enabled automobile companies to reach out to consumers across the globe. Physical location is not that huge a barrier anymore. This means that if an automobile company is ready to transform itself using digital technologies, it can access a lot of untapped markets around the world.
3. Expanding profit pools
As per this survey, by 2020 almost 70% of auto sales in India will be digitally influenced. This shows how important it will be for the auto industry to digitally transform itself if it wants to keep earning high profits.
Digitalization is already having a profound effect on the automobile business, fundamentally changing how manufacturers manufacture and how customers behave. This is disrupting the competitive dynamics of the auto industry, requiring incumbents to become more agile to stay ahead of the competitors.
The connected traveller, autonomous driving, digitizing the enterprise and ecosystem, and digital marketing will be central to the digitalization of the automotive industry. Analysis suggests that there will be a $700 Billion opportunity to create value from the digital transformation of the automotive industry, mostly through initiatives such as channel migration to virtual purchases, value-added subscriptions, and next-generation servicing. The value created for society is likely to be even higher – up to $3.1 trillion – through lower insurance premiums, reduced crash costs, fewer road casualties, and lower carbon emissions.
According to the latest reports, 80% of companies which have undergone digital transformation efforts reported increased profitability, compared to 53% of other companies. This proves that a company that adapts to the changing technology and agrees to go digital is going to benefit a lot.
So, what are you waiting for? Grab the opportunity to digitally transform your company today.