"Any sufficiently advanced technology is indistinguishable from magic."
– Arthur C. Clarke
This quote holds in almost all facets of our lives. From the GPS in your car to the Air Conditioner moderator in your home, there is no aspect of life, in general, and business, in particular, that is untouched by the impact of technology. Akin to various sectors of the economy, the automotive industry is mainly driven by the host of technological disruptions that have defined the first two decades of the twenty-first century.
The Automotive Revolution
No industry can afford to remain stagnant or become complacent with the status quo, particularly a customer-driven industry such as the automotive sector. With the footprint of technology being evident in every aspect of automobile creation and marketing, including design, conceptualization, manufacturing, and customer support, the digital transformation in the automotive industry has been gaining traction at a high pace.
Organizations in the automotive industry are increasingly collaborating with or acquiring technology companies to incorporate the best of technology in every facet of their operations. To this end, the rising prominence of Electric Vehicles and vehicles with advanced software centered around Artificial Intelligence is a trend that is continuing to grow multifold. The interiors of cars are being infused with as much technological enhancement as possible, further driving the automotive revolution. The increased travel time has added to the significance of comfort and functionality in vehicles of all types.
Automobiles and Technology – a view by the numbers
The automotive digital transformation has been a critical catalyst of various recent collaborations between the automotive and technology sectors. For instance, General Motors, one of the world's oldest manufacturers of automobiles, was among the first on the automotive revolution bandwagon with its acquisition of Cruise Automation in 2016. By acquiring the start-up company revolving around self-driving technology, GM positioned itself to manufacture more tech-savvy vehicles.
In the Indian context, Tata Motors applies the Intelligent Cloud Solutions by Microsoft Corporation to manufacture Electric Vehicles with features such as advanced navigation and remote monitoring, to name a few. It is not just automobile companies that are adopting technology and reaching out to their technological counterparts. Of late, technology companies have also displayed a keenness to enter the automotive sector. A prime example of this is Xiaomi, which announced its foray into the Electric Vehicles industry in 2021.
From Challenges to Opportunities for Growth
It is no secret that every challenge is also an opportunity. The greatest inventions in the world have found their genesis in adversity. With the large-scale and far-reaching disruptions created by technology in the automotive sector, the companies in the industry have been compelled to invest more in innovation – for vehicle design and manufacture alike.
When the need to make vehicles more accessible arose, the concept of self-driving cars came into the picture, and now this vertical has become profitable for automobile manufacturers across the globe. The resounding call for reducing the carbon footprints of vehicle manufacturers and users has propelled the ideation and prominence of Electric Vehicles.
The need for vehicles with functionalities that can assist the driver has led to the development of AI-powered vehicles featuring augmented reality controls, navigation technology, and weather forecast reports. There is seemingly endless potential for the integration of technology to drive transformation in the automotive sector, something evident in the sector's growth patterns.
A report by the Indian Brand Equity Foundation revealed that the sales of Electric Vehicles in the country, excluding the sales figures for Electric Rickshaws, registered a 20% growth in 2019-2020. Primarily driven by the sale of two-wheelers, the development of the Electric Vehicles sector has been strengthened by the increasing prices of fuel and the growing climate consciousness amongst the public.
Key Growth Markets on the Horizon for the Automotive Industry
With an ever-rising emphasis on fuel-efficient, compact, and technologically powered vehicles with a minimal carbon footprint, the growth of the automotive sector invariably lies in the Electric Vehicles and Hybrid Vehicles segments. According to a report by the Indian Brand Equity Foundation, India's automotive industry is projected to grow to the tune of Rs. 18.18 trillion by the year 2026.
Therefore, India is one of the automotive sector's highest growth markets. China and Brazil are other markets attracting the focus of automobile companies across the globe. In addition to Electric Vehicles, the focus of the next wave of the automotive revolution is slated to be on harnessing the potential of Artificial Intelligence in the design and manufacturing of automobiles. This would complement the application of Virtual Reality and Augmented Reality in vehicle design.
Technology may be disrupting the status quo of the automotive sector, but the resulting changes and innovations are a harbinger of better and more accessible vehicles for the customers. Even better, the industry is slowly but steadily owning up to its carbon footprint and devising ways to reduce it. Stay tuned for more exciting blogs from Extentia about technology and its powers in the automobile industry.
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