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The future of the automotive industry is set to change, with autonomous driving it is expected to increase annual mileage by 40% in Europe (PWc)
It is predicted that Europe and US will develop at a parallel pace, whereas in China this is expected to be accelerated.
The future of automotive is EASCY
The car of the future “EASCY” which stands for Electrified, Autonomous, Shared, Connected and Yearly updated. In the future, the new car will be more flexible for the user and individual to them. Plus, the cars are more likely to be shared on demand. With the younger generation being more tech savvy this is the key driver in the innovations of autonomous cars.
The benefits of an EASCY Car are:
-It is Electric therefore, less exhaust fumes and noise are emitted into the environment.
- Saves the user personal time as it is autonomous
-Affordable: you don’t have to pay for it outright but instead in smaller payments.
The adoption of electrified, autonomous connected and shared technologies is poised to significantly accelerate innovation within the automotive sector. Traditional model cycles that last five to eight years may soon become obsolete, with a shift towards annual updates to incorporate the latest hardware and software advancements. Given the high costs associated with purchasing new vehicles frequently, customers are unlikely to buy a new car every year. Instead, short innovation cycles will be predominantly introduced through regular upgrades to shared vehicles.
As population numbers rise and mobility needs grow, mileage is expected to rise accordingly. Simultaneously, as driving becomes easier, safer and more cost-effective, there will be a heightened preference for individual mobility within overall mobility trends. Moreover, segments of the population previously lacking access to transportation, for eg. individuals with physical disabilities, may now find individual transport feasible. Additionally, the increase in mileage due to autonomous vehicles completing empty journeys is another.
The change in vehicle inventory and sales
With the sharing of vehicles, there will not be a need for as many vehicles to be produced therefore, reducing the amount of stock that car dealerships will have available, as the demand will not be there. PwC projections show that Europe's current inventory of over 280 million vehicles could shrink to about 200 million by 2030, which would be a reduction of over 25%. Similarly, the US is expected to see a decline of around 22%.
Despite the shrinking inventory, vehicle sales are anticipated to continue to increase. Traditional vehicles will remain in inventory for longer periods, while autonomous and shared autonomous vehicles are expected to undergo more frequent changes leading to increased sales. New car sales rise by 34% during the transition period.
Implications for Manufacturers of the automotive industry
As we anticipated, the swift and extensive reorganisation of the automotive sector will bring about profound consequences for the entire industry and its associated value chains. Fundament structures and mindsets will need to adapt rapidly to address the forthcoming developments by 2030 and beyond. In order to sustain their success, manufacturers and suppliers alike will need to prioritise customer-centric innovations.
Companies that remain solely fixated on the traditional production and sale of cars will encounter significant challenges in navigating the ongoing restructuring of the automotive sector. In the era of “EASCY” where emphasis is placed not only on the product itself but also on the mobility services, businesses must pivot their focus to ensure alignment with evolving customer expectations. A crucial aspect of this transition involves seamlessly in the “hardware” aspect represented by the vehicle, with the “software” component, comprising the various services offered. This integration is pivotal in creating holistic mobility solutions that cater to the diverse needs of modern consumers. It necessitates a shift towards flexible production lines which are capable of accommodating not only the manufacturing of vehicles but the integration of cutting-edge software functionalities. Only by effectively bridging the gap between hardware and software can automotive companies position themselves to thrive in this dynamic landscape.
How can ERP help automotive manufacturers?
In light of the impending changes in the automotive industry, manufacturers face a pressing need to adapt to the changes. Enterprise Resource Planning (ERP) systems can play a crucial role in helping automotive companies navigate these implications effectively.
By providing a unified platform for managing various aspects of their operations, ERP solutions enable manufacturers to streamline processes and enhance efficiency across the value chain. With ERP, manufacturers can integrate data and processes seamlessly, facilitating collaboration between different departments and enabling real-time decision-making.
Moreover, ERP systems offer robust functionalities for managing production schedules, inventory levels and supply chain activities. Thereby, enabling manufacturers to respond swiftly to changing market demands. Additionally, ERP platforms often include modules specifically tailored for automotive industry needs such as product lifecycle management and quality management, further enhancing operational excellence. By leveraging ERP technology, automotive manufacturers can position themselves to effectively address the challenges and capitalise on the opportunities presented by the industry’s reorganisation, ultimately ensuring long-term success in the dynamic marketplace.
Integration with hardware is a possibility too with ERP, which could also benefit the automotive industry, by prompting service reminders / upgrade software reminders. This could be managed internally or set up for automation for the end user via a CRM.
In conclusion, the automotive industry is on the brink of a transformative shift, propelled by the rise of EASCY cars. This evolution promises a future where mobility is not only more environmentally friendly and convenient but also more accessible and affordable for all. With the adoption of these technologies, traditional models of vehicle ownership and products are undergoing a significant overhaul. As we move towards a future where hardware and software integration is paramount, the role of ERP systems in streamlining operations and facilitating innovations becomes increasingly crucial. By embracing ERP technology, automotive manufacturers can adapt to these changes, optimise their processes and thrive during this change.
In the automotive industry and not yet started your ERP search contact us to find out how WinMan can benefit you.
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