The Automotive Industry of the Future: How Big Data and the Internet of Things Are Transforming the Way We Buy and Drive Cars
The Power of Big Data and the Internet of Things in the Manufacturing Sector
In today’s tech-savvy world, most people are familiar with the idea of consumer and technical data collection. Business leaders use this data to get complete view of any given market segment. The sheer amount of business information that is currently collected has inspired the term “big data.” This “big data” means different things to different companies. It can include anything from records of retail purchases and buying patterns to product information and systematic feedback.
Many business professionals view Internet of Things (IoT) as the next big thing in the world of high technology. The online dictionary for IT professionals Webopedia defines IoT as “the ever-growing network of physical objects that feature an IP address for internet connectivity.”
The term also refers to “the communication that occurs between these objects and other Internet-enabled devices and systems.” IoT can accomplish great things in a number of industries when paired with the benefits of big data. Examples of “things” that can fall under the IoT umbrella include many consumer goods. Electronic appliances. Connected security systems. Household lights. Speaker systems. And a full range of automotive vehicles.
The International Data Corporation is an American market research/analysis firm. It recently released a study on the enormous potential of IoT and big data in a range of manufacturing industries. The study projected that worldwide manufacturing will generate $746 billion by 2018. This sentiment is echoed by Morgan Stanley. Morgan Stanley estimates that IoT-driven automation in manufacturing could save $500 billion. (Or 2 to 4 percent based on a penetration rate of 50 percent).
The Technological Future of the Automotive Industry
Another recent study by McKinsey & Company concentrated on the manufacture of cars and trucks. This McKinsey “Global Expert Survey” determined that automotive suppliers have big plans for big data and IoT. In fact, 92 percent of automotive industry leaders feel that these technologies will have a “huge impact” in the way their products are designed and manufactured. Big data and IoT will also influence the way that automotive companies interact with and sell to their customer bases.
The global nonprofit Application Developers Alliance (ADA) regards automotive innovations as a microcosm of these digital technologies. “Industry experts estimate that every car will be connected in some way by 2025,” the ADA estimates. It goes on to report that the “market for connected vehicle technology will reach $54 billion by 2017.”
Forbes also recently chimed in on this issue with the article “Big Data’s Big Impact Across Industries.” Writer Howard Balwin complied reports from the Center for Automotive Research and the Michigan news site MLive. His article concluded that big data is an “engine of innovation” and “about to get bigger for auto industry.”
Otto Schell of General Motors sums up the whole subject in a few words. “The use of data is not anymore questioned.” He goes on to report that the “entire business is changing.”
Car and truck companies are embracing the full potential of big data/IoT technologies. Modern digital technology within the automotive sector has already produced some stunning results. Business opportunities that are driven by big data and IoT include connected products and logistics that use embedded sensors to communicate.
This communication can occur among “smart” vehicles or between these vehicles and a strong digital core. These types of technologies can do great things. Assisting in preventive maintenance. Coordinating activities within a fleet of vehicles. They can also help detect engineering defects and determine driving patterns.
There are many other key IoT and big data trends in the automotive sector. Tracking customer sales and services. Fostering seamless collaborations between automotive companies and high-tech companies such Google.
Perhaps the most exciting product of the marriage between automobile manufactures and IoT/big data technology is the self-driving car. These cars are still in development. But they stand to impact the automotive sector in profound ways. Morgan Stanley addressed the enormous potential of autonomous vehicles in its April 3, 2014 Blue Paper. The section entitled “The ‘Internet of Things’ Is Now: Connecting the Real Economy” reported that full penetration of self-driving vehicles would save the US economy a total of $1.3 trillion. This figure increases to $5.6 trillion at the global level.
The Blue Paper goes on to estimate that self-driving cars and other state-of-the-art digital marvels will save the United States $158 billion in estimated fuel savings and $488 billion in estimated accident avoidance savings.
So we look to big things from big data and IoT in the future. But we cannot underestimate the power of the exciting things that are happening right now. Otto Schell, once again, sums things up nicely. “I think when we talk in general about cars, you see all over the place a lot of things are digitalization, connect the car.” He believes that the automotive industry must use digital technology to serve consumers today. “We give them options to go into their lives. And this option is very clearly digitalized.”