Buying a new car used to be relatively straightforward. You drove to the local dealer (whom you probably knew by name), test drove a few models, negotiated a deal, and left the car lot with a new car. Afterwards, you took the vehicle back to the dealer for regular maintenance or to fix problems. The relationship clearly was between you and the dealership. Today, the process of buying and maintaining a car can involve many more players. Information is flowing back and forth constantly between buyers, manufacturers, dealers, third-party resources, and even the vehicles. Each entity is capturing different types of data, analyzing the information and using it to make more informed decisions. And yet, we have only scratched the surface on the benefits possible when all the data being generated is standardized and shared through the automotive supply chain.
Next year, the automotive industry is projected to become the 2nd largest generator of data (McKinsey Global Institute). Not only is digital data being generated from the approximately 10,000 sensors embedded in each new vehicle, corporations and buyers also are generating constant streams of internal data (i.e. emails, service memos and consumer comments) along with external sources such as online car reports, social media posts and vehicle reviews. With all this newly available information floating around, one can’t help wondering who owns it and who decides how it can be used. To figure out the answers, it is helpful to begin by looking at who generated and controlled automotive data in the past.
As mentioned before, dealers have long held the relationship with the customer. Dealerships were where one went to purchase a vehicle and have it maintained over its lifespan. Therefore, most of the customer data including demographic information, buying preferences, purchasing history resided with the dealers. The information was, and sometimes still is, captured on paper records in countless formats. In addition to customer knowledge, local dealers often carried multiple vehicle models from a different brands. This gave them unique access to manufacturers’ data such as performance records or maintenance trends, which they used at their discretion for selling.
On the other side, OEMs traditionally held vehicle manufacturing data like when, how and what components were used in the design of their automobiles. Eventually manufacturers began establishing their own call centers and websites, allowing them to gather and collect digitalized information directly from the customer. As data began flowing from customer to manufacturer, dealers grew concerned about being left out. In fact, suspicion and mistrust between dealers and manufactures was the main reason very little information was shared along the supply chain. OEMs were concerned that dealers would use vehicle knowledge to sell other brands, while dealers didn’t want to lose the powerful position of being the primary customer interface.
Today, there are no clear lines of data ownership. Information about customers, manufactures and dealers is widely available, creating a power shift from the one who initially captures the information, to the one with the knowledge and resources to use it.
Information is power and the more you know, the greater your competitive advantage. Manufactures and dealers are beginning to realize they are stronger together than apart. In this new landscape, data is more readily exchanged up and down the supply chain. Using the latest technology platforms and software to capture, store and analyze the information, companies are using insights gained from data to improve everything from vehicle design and manufacturing, to marketing, sales and post-purchase services.
Yet in a futurist world where everyone knows everything, the ultimate winner may be the consumer. When deciding to purchase a vehicle, customers will be able to access, consolidate and compare as much information as they want. They will then use the data from vehicles, dealers and manufactures to determine which relationships are in their best interests. For example, consumer can choose where to go for a car loan, they can request vehicles designed to their specifications, and they can determine who supplies the post-purchase services. When choices are no longer restricted by geography or access to information, it puts consumers in control. Finding ways to attract and retain these data-savvy consumers may turn out to be more of a challenge for those in the automotive industry than creating and selling vehicles. In fact, it is not too far-fetched to envision a world where the consumers, and their related knowledge, is more valuable to manufactures than the physical products. Whatever changes the future may hold for the industry, it is clear that sharing data is an important next step. In the words of Henry Ford, “If everyone is moving forward together, then success takes care of itself.”