Technology Mirror
Digital Transformation in Automotive Industry

Digital Transformation in Automotive Industry

With the advent of autonomous vehicles and electrification, the automotive industry is undergoing a groundbreaking shift towards sustainability and efficiency. As such, transport companies like Scania must leverage the use of digital transformation to improve its core processes and create business opportunities as well as build disruptive solutions to meet the pace of change across the industry.

Digital transformation alludes to automotive companies integrating current technologies across vehicles and business operations. The objective is to improve efficiency, fulfill customer expectations, and position for the future. This can entail utilizing connected systems and data to improve production quality and output in manufacturing.

Digital technologies play a significant role in transforming the automotive industry and disrupting traditional business models. Nowadays, digital technologies in vehicles represent at least 50% of the total value of a vehicle (CCOO, 2018). Software and hardware integration has increased not only the functionality of a car but also its complexity.  

Crucial aspects have been identified that play a role in accelerating the process of digitalization of the automotive sector, such as driver connectivity, location-based services, and the type of driver dependent on their tastes and preferences, a feature that did not exist 20 years ago.

Also, Digitalisation has brought about consequential improvements to the value chain by increasing efficiencies, reducing costs, and generating greater collaboration and innovation. It has made it possible for companies to evolve from business-to-business approaches through their dealerships to a business-to-consumer model, with new ways of engaging with customers and partnerships with suppliers interrelating through data. Increasingly connected vehicles will change business strategies from selling a product to offering value focused on customer experience (Marcus Hoffmann, 2019).

Scania a world-leading provider of transport solutions has benefited immensely from integrating modern technologies across its business operations. Scania opines that Connected and Autonomous vehicles are becoming crucial for increasing efficiency in transport and value chains.

By making use of real-time data from over 430,000 connected vehicles, Scania has been able to develop services that lower fuel consumption and maximise vehicle uptime, with contracts customized for each truck based on real-time user data. This has resulted in fewer and usually shorter stops, less waste from unnecessary oil changes, and up to two days’ fewer standstills per vehicle a year.

With the help of digitization, sophisticated diagnostic systems are able to provide predictive maintenance. For example, intelligent components and ubiquitous connectivity will allow certain components send a signal when vehicles need maintenance or replacement. This advancement has been particularly a game changer for Scania who also provides services, maintenance, and repairs across its dealership which contributes 40% of its revenue as a transport company.

Overall, digital transformation has revolutionised the automotive industry and brought great benefits to businesses in the sector ranging from improved product quality management, reduced operational cost, enhanced customer experience, etc. I believe strongly that with the continuous advancement of technology, the automotive sector will continue to experience breathtaking developments.

ByvSarah Ikhagbode 

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