The Automotive Industry's New Digital Transformation

Holger Masser

Digital innovation has struck with lightning speed in the automotive world. Cars only five years old seem like relics compared to the newest vehicles. And this transition to digital is only going to accelerate.

The newest cars, and those that are still on the drawing board, will do things for us that have in the past been done only by humans. We are on the verge of some great changes, some of which may be hard for us to get used to.

Technological innovation is not new to the automotive world; there has always been change in this regard. In 1908, the Ford Model T was revolutionary as the first to be mass-produced on an assembly line. Self-starting engines came just a few years later. Car radios were developed in 1930. Fluid coupling technology gave Oldsmobile the Hydra-Matic transmission in 1940. Power steering goes all the way back to the 1800s, but the first commercially offered system came on the 1951 Chrysler Imperial.

In 1956, General Motors developed a concept car called the Firebird II, which was equipped with an “electronic brain.” Sensors tracked a metal conductor in the lane and the car followed it. Today, that seems almost funny. In 1995 we saw the first GPS navigation systems. The first mass-produced hybrid electric vehicles came in 2000.

But with the advent of digital innovation, new tech developments will come much faster than ever before. Consider how long it took for power steering to become commercially available: In 1876, a man named Fitts first used the idea, and 75 years later we finally had Chrysler’s Hydraguide system. It is unlikely we will ever see that much lag time again.

The rules have changed: digital disruption

With the advent of digital technology, today’s ideas go from drawing board to production in months rather than decades. And because of digital innovation, important day-to-day decisions are made in real time. We can do this because platform-based technology gives us immediate access to Big Data.

More efficient production processes are just one element that is transforming the auto industry. New digital business models are changing the industry across the board. These new business models are disruptive to the industry’s established models and processes. Rapid changes are bringing digital disruption to the linear business models of yesterday.

OnStar

Some of the new capabilities are truly impressive. General Motors’ OnStar system enables prompt diagnosis of vehicle problems. It can remind you by sending email when scheduled vehicle maintenance is due. It can run monthly checks of your engine and transmission. It checks the integrity of systems such as your anti-lock brakes. And now you can even use your smartphone to send an intended destination to the car’s navigation screen.

All of this is in addition to procedures that OnStar has been able to do from the very start. Its most common uses are to locate the vehicle or remotely start the engine. If your car is disabled, help comes at the touch of a button. And if you are in a crash, the system automatically signals that you need immediate help.

Robots in assembly

German automaker BMW has begun using assembly robots that work with humans. These new collaborative robots are overcoming past concerns that robots were not safe for humans to work around, a problem that limited the usefulness of both humans and robots. Because humans had difficulty working cooperatively alongside robots, a solution has been slow to develop. But BMW found a way to make it work by slowing the robots to increase safety levels.

In BMW’s Spartanburg, South Carolina assembly plant, robots work with humans to insulate and water-seal vehicle doors. The combination of human dexterity and robot strength makes the task easier. Humans doing this alone could work for only about two hours before resting. Now humans can work a full shift without rotating workers. In 2014, BMW expanded this technology to its factories in Germany.

Driver assistance and protection

Another German company, Bosch, is building intelligent sensor technology for automobiles. This is part of the driver assistance system that takes over some functions of driving in emergencies. The system constantly monitors the car’s surroundings for potentially dangerous situations. If one occurs, the system takes over certain driver functions to react as quickly as possible. First it warns the driver of the situation, and if necessary can intervene automatically. In a pending head-on collision, the system can activate the brakes with maximum pressure. The industry calls this an Advanced Driver Assistance System. It uses sensors, video, and ultrasound to interpret surroundings. It can even facilitate parking and maneuvering at low speeds.

Tesla Motors makes electric vehicles, focusing on serving the needs associated with today’s connected car. The company is embracing digital innovation to meet the challenges of supplying batteries and charging stations for the electric cars of tomorrow. Alternative power trains such as Tesla’s, as well as alternative fuels and hybrids, are all pushing change in the industry.

Re-imagining the automotive industry

Digitization is re-imagining the automotive industry’s business models. The digital economy combines physically and electronically connected devices with Big Data. The result is a transformation of the industry. Platform-based innovation and hyperconnectivity are shaping the new world of the automobile.

Original equipment manufacturers (OEMs) and suppliers are using these new technologies to answer questions and create new partnerships. Automotive manufacturers are a spending more on research and development to add more digitization to their vehicles. Providing consumers with the digital capabilities they want is key to future market success.

Visit Automotive. Reimagined for the new economy to learn more about digital transformation in the automotive industry.


Holger Masser

About Holger Masser

Holger Masser is global vice president of the global business unit Industry Business Solution of the Automotive Industry at SAP. He is responsible for the entire solution portfolio spanning from automotive supplier, automotive OEM, and automotive retail, and importer business. He joined SAP in 2011 and has been working for more then 20 years in the automotive industry, with 10 years in Asia. Masser has profound knowledge in the entire value chain of the automotive business, implementing long-term IT strategies aligned with corporate company objectives and business strategy. In Asia, he primarily focused on logistics, sales, aftersales, production and financial services on automotive OEM, retail, wholesale, and regional and headquarter levels.