Is the automotive industry already on the digitalization train? - Why the automotive industry always lags a few years behind.

Introduction

Even before the world was shaken by the pandemic we all know so well, some companies were already launching their digitalization projects. Besides production difficulties, staff shortages, and supply chain issues, they also had to address the future to be well-positioned for the coming years. Digitalization isn't limited to the business-to-customer sector; the construction of various "smart factories" has also been a recurring topic of discussion in recent years.

The €411 billion in revenue generated in 2021 in the German automotive industry alone demonstrates the power of the sector and its importance to the overall economy in some countries. However, it's not just large corporations that can benefit from digital solutions, but also smaller manufacturers and suppliers who can use them to position themselves effectively for the years ahead.

In the following paragraphs, I'd like to give you a brief glimpse into the potential future.

What will change for customers?

The basic sales process will remain largely the same for many years to come, but some retailers will have the opportunity to try something new. Audi has become known for its use of virtual reality headsets, not internally within the company, but with its customers. This allows potential buyers to virtually view and sit in their newly configured car beforehand. This offers several advantages for both Audi and the customer.

Potentially uncertain decisions regarding color or interior features can be reviewed and modified early on. This further increases the customer's anticipation of their future vehicle. Audi itself benefits from the additional equipment choices, as many customers forgo certain extras in the standard configurator because they don't consider them necessary. After the virtual tour of the car, they suddenly select more options. The ever-improving hardware allows for highly detailed representations of the vehicles, thus making the decision-making process easier for customers.

Opportunities for Smaller Businesses

Besides large corporations like VW or Daimler AG, hundreds of smaller companies depend on the larger ones. Without customers, no revenue is generated, and it becomes difficult for the company to survive. Digitalization offers many opportunities but also risks. Depending on the company, a more conservative course can be chosen, or a complete 180-degree turn can be made. The current years are pivotal for many businesses in this industry. In addition to combating material and personnel shortages, a strategy for the future must be developed. Technologies such as virtual reality, augmented reality, and mixed reality can be used to produce more cost-effectively and efficiently. Maintenance and troubleshooting can be handled digitally, eliminating unnecessary costs for technician travel or hours of production downtime.

These technologies can also be of great importance for research and development. Working without safety risks and avoiding the waste of money on unnecessary prototypes are the potential advantages of future production. Existing hardware and software, when used correctly, are capable of achieving remarkable results, but this leap into the digital world must be embraced. Then courage can be rewarded.