How is digitalization revolutionizing the automotive industry?

The automotive industry is undergoing a rapid transformation due to the introduction of digitalization. It has allowed for advances in vehicle technology, manufacturing processes, and marketing strategies. As a result, the automotive industry is becoming more efficient and costeffective, while also providing customers with more personalized and convenient services.

Digital technologies have drastically improved in recent years and have transitioned from being used by experts to being part of everyday life. Similar to the effect of electricity on communities, the advent of digitalization also has impacted everything profoundly. However, the speed of this change is different in an established company compared to a start-up, all industries are now influenced by digital transformation, and the automotive industry is no exception. 

With the introduction of new technologies, the auto industry is being forced to change the way it operates. In the past, it has been largely reliant on analog processes and technologies, but now we witness emerging changes including but not limited to autonomous driving, ride-sharing, connected supply chain, digitalized car buying process, predictive maintenance, and even remote diagnostics that open a new window of the opportunities for businesses to develop innovative services.

Digitalized Purchasing Process

Two major disruptions in recent years have somewhat changed the traditional car-buying experience: the emergence of the mobile-first generation, and the pandemic. These disruptions, along with the arrival of new technologies like AR/VR and 360-degree views, have made the digital car buying possible and accelerated digital transformation. Technology changed the game and the car buying experience is much different now. 

With the internet, customers can do extensive research on their own and come into the dealership armed with information. AI-powered applications like 360 Car Photography Apps or Car Virtual Tour Builders help customers find out everything about a car with a click of a button. With advances in image processing physical turntables and actual showrooms are getting replaced bydigital marketplaces using a virtual turntable that showcases a great deal of information from every angle of the car. It allows consumers to explore their car of interest in a realistic way, seeing what it looks like inside and out and getting the most pertinent technical information. 

These digital marketplaces, with the help of machine learning, assist customers in price comparison and evaluation. These advantages increase the level of transparency establishing trust between customers and car dealerships. This has led to a more relaxed and enjoyable car-buying experience. Dealerships will also benefit from these emerging technologies. A virtual tour builder gives dealers a chance to draw customers’ attention in a few minutes and get more qualified leads with serious buying decisions. It is really a timesaving and cost-effective digital transformation in their business process.

The necessity of Online Presence

Auto dealerships still play a vital role in the market to such an extent that search volume for key phrases like “car dealership” doubled a few years ago. But according to Google, the number of times that customers visit a dealership before buying a car decreased dramatically. It means that people have made their visits more purposeful and determined. It is good news for a dealer as well to reduce the number of “maybe sales”! Google also reveals that over one-third of all car buyers start with an online search and about 70% of users are heavily influenced by interactive options like engaging 360 car photos and virtual tour videos on YouTube compared to traditional advertising tools like newspapers, magazines, and other print content. The most interactive videos include highlights of features and options, as well as walkthroughs of the interiors and exteriors.

In response to these new demands, auto dealers need to provide their clients with a fantastic online experience on their websites and social media platforms which should be optimized for all devices, smartphones in particular, since 1 out of 3 customers use their mobile device while searching for cars. Such an online presence allows dealers to have more touchpoints and increase the possibility of closing a deal effectively.

Connected Cars

In today’s digital age and mobile-first generation, customers are expecting similar seamless experiences everywhere. The same expectations are there for newer vehicles in the market. These expectations include everything from high-quality infotainment systems for passengers to assisted driving and parking with payment from the dashboard. Thanks to connectivity capabilities like Bluetooth and Wi-Fi, people can now watch movies, use Google Maps, and listen to music with Bluetooth connectivity. Smart vehicles detect drivers’ sleepiness using Galvanic skin-response sensors and can warn the driver of any harmful accidents. Also radar, cameras, and laser scanners outside the car “read” the road and then respond. All the above features and more come preloaded or customized based on the demands of the consumer.

Predictive Maintenance

In order to address these changes, automakers provide new services to their customers like self-diagnostic systems. We can now become aware of the issue before it’s a problem. Data cloud connectivity will keep customers and car makers in contact. Vehicle servicing has become digitized, requiring not just mechanical attention and repair, but also a tech-savvy technician to maintain and update software. This integration never forces customers to leave their garages for routine car maintenance. General Motors, for instance, uses this technology to send monthly checks of the engine, transmission, anti-lock brakes, and other systems to the vehicle’s owner, reminding them when maintenance is due via email.

Sean Toussi

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