The future of the automotive industry has been thrown open to players that had no association with it until now. As new technology enters the market like sensor technology, mixed reality, and 3D printing, newer contenders are getting access to automotive R&D centres as well as boardrooms. In such a scenario, where is the sector headed?
Traditional industries are being disrupted in the wake of widespread digitalization. The automotive sector, in particular, has been given a wake-up call by firms like Google, Apple, and Uber, who are making inroads into the market share.
Pictured here is a concept developed by Siemens PLM and Hackrod using additive maanufacturing and 3D printing technologies. The aim is to demonstrate that you don't need a huge factory to make your own car.
Up until now, carmakers have enjoyed a long, fruitful existence selling a product that has remained largely unchanged since Ford introduced the mass-produced Model T. Since cars have always been desirable (and necessary), business models supporting the industry have allowed automakers to consolidate their own niche in the market.
However, progress is inevitable. The sharing economy has undermined the stability that previous generations of carmakers enjoyed. Hence, automotive firms have suffered at the hands of more flexible, accessible, and innovative services that suit a more dynamic economy. As a result, new ideas are being explored to find ways to profit from an audience that is largely given to instant gratification and more personalization.
New players in the automotive industry are not necessarily disruptors. They can be viewed as new sets of challenges that will only enrich and diversify the sector to better cater to the modern consumer.
The other side of the coin
Technology is driving disruption in the industry on a major scale, but that does not necessarily mean the automotive market size will diminish. If anything, it will become more diversified as new business models and different technological expertise enter the field. A shift to a more digitized and consumer-focused market does mean that automotive firms do not monopolize the scene anymore.
For instance, Siemens PLM Software has entered a partnership with Hackrod, a California-based startup rooted in the entertainment industry, to build upon the central idea that ‘two kids in their garage should be able to design their dream car and have an ecosystem that (lets them) put it together.’
Del Costy, SVP and MD Americas at Siemens PLM Software says that the Hackrod team brings an entirely new perspective to the table. Together, the two firms are supporting what Costy calls the ‘gamification of engineering’ to engage the next-generation designers and thinkers, enabling them to ‘pick and choose how they want this thing to work, and that background of engineering expertise is there for them.’ Del Costy continues, “Everything they (Hackrod) do is the art of possible. They are just diving in and saying this is what the youth expects: let the system do the back-end computation.”
New players in the automotive industry are bringing cutting-edge technology closer to modern consumers- be it manufacturing, software, design, or any other aspect of the automobile.
The automotive future is digital
The previously-discussed diversification of the automotive sector and the entry of multi-national giants into the market will define the future of the automotive industry and revolutionize how people use, interact with and produce vehicles.
Collaboration between cutting-edge startups and established conglomerates like Siemens has the potential to bring the best of emerging talent and real-world clout, introducing lasting change to the industry. Other industries interlinked with the automotive sector also stand to benefit from new technological applications brewing in the latter, such as 3D printing.
The automotive industry makes a compelling case for itself as a shining example of how industries of all kinds must adapt to survive the winds of change brought about by the overwhelming power of digitalization, and the unstoppable democratization of a service-focused consumer base.