The Future of the Automotive Industry – How to Reach New Heights

The automotive industry is in the beginning of the greatest transformation it has ever experienced. The industry 4.0 is happening: New business models, changing industry regulations and the explosion of digital technologies and cloud- based solutions, as well as the rise of electric vehicles, are disrupting the automotive landscape.



Cyber physical solutions and online services, along with cloud applications, are starting to play an increasingly important role for automotive companies; helping to increase revenue, improve competitiveness and drive customer loyalty.

The industry is a wide range of companies (OEM’s, Wholesalers, Retailers, Rentals), who are involved in the vehicle order, selling and delivery process.

The Automotive Industry Digital Transformation will be importan as it is one of the world’s most important economic sectors by revenue and it will affect a lot of consumers. The most crucial aspect of the Digital Transformation is how companies manage to renew or solve its distribution channels, connectivity and data accessibility with its local partners.



A mutually beneficial collaboration model is needed to successfully communicate with its network and partners. Companies have to start make more co-operation as they are tackling and facing the same obstacles. To perform on the highest level – the industry needs visibility and transparency.

OEM’s, wholesalers and retailers must unite to get a complete picture of the actual business and latest data. The automotive sector is so competitive that it cannot allow information delays and unstable data exchange. Digitalization is enabling collaboration with various business units and that will at some point drive the whole businesses forward in the right direction.

Currently the showstoppers are the massive amount of systems in-use and the integrations, which are complicated as the technology used is out-of-date. The rise of new technology has created tremendous possibilities and business advantages.

The industry needs a collaboration tool that optimizes processes and enables direct communication with its partners and customers. It creates a more efficient and open environment, where the actual vehicle sales numbers increases.

The current focus for all parties (OEM’s, wholesale and retail) should be fixing the distribution channels – ordering, selling and delivery of vehicles and develop new partnerships as the old model is not working.

If that process is settled and truly effective – we could build a lot of new innovation on top of that. Without that it’s like building a skyscraper on a sloppy foundation – it will at some point reach its dead-end.

Today, the automotive industry has its limitations because of the closed tech ecosystem – the data exchange is poor, connectivity is harmed and information is hidden and inaccurate because of systems do not communicate with each other. The industry needs to create intelligent networks along the entire value chain. Every part of the value chain has to be connected with transparency and visibility in mind.

Deep collaboration tools are generally missing in today’s automotive distribution model. It’s more like the wild-wild-west, where companies especially retail networks continue to be characterised by strong brand competition with rival partners.

The same brand retailers compete for same customers. The winner of this discount rally is the customer, not the company as it has sold the vehicle with almost NO MARGIN.

This is a major factor why the automotive dealerships have become such a low margin business. On top of that, this is the result why dealers and customers are not pleased with the sales process. In fact, 1 out of 4 customers are not happy with the vehicle buying process and 33% consider buying a vehicle online*.

*Source: McKinsey&Company



Currently the vehicle buying process is the most “unknown” purchase you can get on the market. Usually after the order at the dealership you will hear again from the sales man two weeks before your vehicle will be handed over. What happens in between is like “What happens at the dealership, stays at the dealership”.

The customers have a better overview of the “product”, when buying a pair of sneakers then buying a car. I don’t have to remind that the last product is almost 100x times cheaper.

Buying habits have changed and consumers are used to track its purchase or receive the right data at the right time. It increases trust, customer satisfaction and brand loyalty.

Vehicle buyers want to be engaged in the buying process. Not only receive data of vehicle statuses, but actually manage their “vehicle” – starting from configuration, add-ons and everything related to after-sales and maintenance. These actions will increase brand loyalty and customer satisfaction because the vehicle buyer is engaged in the buying process.

This could be eliminated with deep collaboration systems, where stakeholders have open communication, connectivity and data visibility with-in the manufacturer, importer, dealer and vehicle buyer relation.

To build a winning, profitable brand ecosystem manufacturer, importers and dealers must develop a strong roadmap and work closely to understand its needs. To enter the digital transformation era without a strong plan will lead to failure, decrease in market share and though loss to competition.

Success will knock at your door, when breaking down the ultimate challenge and support true network collaboration and mutual problem solving.

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