From Oil to Data: An Overview of Recent Transformations in the Automotive World

From Oil to Data: An Overview of Recent Transformations in the Automotive World

Over the past few years, the critical components of cars have shifted from being mechanical or hardware toward being software parts. Software now governs everything in today's cars, from driver assistance (e.g., brake control) to compliance (e.g., engine management for carbon dioxide emissions) to infotainment. As a result, a modern car comes with more than 50 computers, with millions of lines of embedded code. The increasing amount of technology in vehicles enables a number of features. Cars can now connect with mobile or electronic devices, synchronizing phone functions such as maps, music, or even dashboards on car screens. Some vehicles can automatically communicate with other vehicles, with the road infrastructure, and with shops and restaurants. Insurance providers can capture dynamic per-second driving behavior and contextual environment data to improve underwriting and pricing approaches. Thanks to the European "e-call" regulation, starting 2018, all new vehicles will come with a device that will automatically dial an emergency number in the event of a road accident, sending impact sensor information and GPS coordinates to local rescue agencies. In addition, several companies are testing their products in a completely new market — the self-driving car — which IDC believes will take off in four to five years. This product disruption is creating a new set of business issues for automakers. In particular, recent IDC research shows that for more than 30% of sector leaders, product digitalization and the increased complexity it brings is one of the biggest challenges, even ahead of more perennial industry pain points, such as elongated supply chains, quality issues, and recalls. This represents a strong call to action for all companies in the automotive industry.

In This Perspective
A Changing Ecosystem
An End-to-End Company Transformation: The Case of Pininfarina
What Does This Mean to Manufacturers?
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