I co-authored a white paper which focuses on the way digital is (and likely will) disrupt the automotive industry. This white paper was produced by me and my project group as part of an assignment for Squared Online.

1. What’s Driving Disruption In The
Automotive Industry?
We are witnessing a revolution. Digital technologies
are disrupting life as we know it. Even cars are no
longer what they once were. In this White Paper we
suggest what digital trends are likely to impact on
the automotive industry and what the digital vehicle
might become.
In 1908, when the first Model T rolled off the
production line, Henry Ford had effectively disrupted
the fledgling automotive industry. By providing a
mass produced vehicle for the mass market, Ford
overturned the precedent of hand-made, expensive
cars manufactured in small quantities for the elite
few.
Now in 2015, new urban environments, traffic
congestion and connectivity have transformed
attitudes to the automotive industry. Digital disruption
has changed the way we buy cars and is threatening
to overturn human relationships with vehicles.
Navigation, communication, infotainment, safety,
diagnostics and autonomous cars will all contribute
to a landscape few could have predicted even 25
years ago.
“The Internet, wireless, and smartphones, are
transformational.”
- Buzzcar and Zipcar founder Robin Chase
Therefore with connected cars, the independence
the original cars offered has been superceded. This
is profound. As cars become an integral part of the
Internet they have less value in themselves. Their
power stems from connectivity not independence.
What does this mean? Human error will be
potentially eradicated. Real time updates will alert
you to parking spaces and traffic jams. Mobility
will be offered to the ageing population and car
ownership will be deemed irrelevant.
Big data fuels the car’s transformation. Digital
disruption has brought about the need for connected
vehicles that can access, consume, create and share
information with other vehicles and surrounding
infrastructure in real time. So ultimately the car could
become just one aspect of a joined up transportation
system, just another service.
CURRENT TRENDS
Customer Behaviour
Compared with other consumer activities, shopping
for a car used to be a discrete activity with its own
defined set of steps in the process. However, in
today’s world, the Internet, mobile technology and
social media help educate consumers to make a
well-informed decision – their Zero Moment of Truth.
Digital resources are now key to the buying process
with two-thirds of consumers referring to an online
source for information1
.
Consumers are therefore using mobile devices to
research prices, read vehicle or dealer reviews and
to find nearby dealerships. Those customers who
visit dealerships are near the end of the buying
process and use mobile devices to reinforce their
decisions with unbiased, third party information
These changing customer habits and expectations
are causing manufacturers to rethink how they build
and sell vehicles and are threatening the role of the
traditional car dealership. Indeed the rise of online
car buying sites such as webuyanycar.com has
already had an effect on the relationship between the
car buyer and car dealer over trade-ins.
Customer Expectations - Infotainment
With the average commuter spending anywhere
between 40-70 hours in their cars every year, the
car has become a second home. So a potential car
buyer today demands more than just a great driving
experience; they expect connectivity/infotainment as
standard.
image reference : http://www.seriouswheels.com/pics-def/Ford-Model-T-Centennial-1926-Model-
T-Assembly

2. ●● The connected car market is expected to
grow to an estimated $98.4B by 2018
●● 90%+ of all cars sold worldwide will include
some type of connectivity by 2020
●● Almost 95% cars in many countries to be
permanently online by 20172
image reference : http://www.bnotions.com/industrypractices/automotive/
This demand to always be connected and to have
entertainment available at our fingertips has been
widely embraced by the automotive industry, so
much so that infotainment and media services
systems are becoming ever more widespread in new
vehicles. Consumers already have their favourite
services like iTunes, Spotify or TripAdvisor and so
will expect the connected car of the future to provide
the same experience they are used to at work,
at home or on the move via their mobile devices.
Interestingly, Spotify has already signed deals with
Volvo, Ford and the on-demand taxi app Uber.
The disruption continues with the two largest
mobile operating system providers now providing
infotainment systems. Over the past year Apple has
launched CarPlay and Android has countered with
its own Android Auto – both of which will enable
customers to integrate their smartphones into their
vehicles and reduce the chance of distraction when
driving3
.
At the recent CES show in Las Vegas, vehicle
manufacturers also demonstrated the importance of
new, cutting-edge infotainment technologies. Audi,
in partnership with NVIDIA, has developed a digital
cockpit with high-end 3D graphics, along with the first
automotive-grade tablet. Volkswagen has integrated
gesture control into their new Golf R Touch,
which will allow drivers to access a full range of
infotainment systems with simple hand movements.
Lastly, Jaguar Land Rover introduced their
revolutionary justDrive system, which offers a voice-
activated experience through your smartphone.
Customer expectations – Safety &
Diagnostics
The connected car can offer so much more.
“Many consumers currently think of connected
car services in terms of infotainment and WiFi,
but this changes when they are made aware of
the variety of options the technology can offer.
Safety and diagnostics appear to be the most
attractive features to drivers, illustrating just how
important road safety and vehicle maintenance
are in consumer purchasing decisions.” 4
- Pavan Mathew, Global Head of Connected Car at
Telefonica
A number of systems already exist which make
travelling safer, such as General Motors OnStar,
which gives the car the ability to call the emergency
services automatically in the event of an accident.
Other systems include Lane Keeping Assist (where
the car auto-steers to stay in its lane), as well as
Radar Control Cruise Control (which maintains the
car at a constant distance from the vehicle in front).
Telefonica4
also found that more than 60% of drivers
would like to be able to use their mobile device to
check their car’s condition before going on a long
journey. These drivers wanted easy to understand,
diagnostic information to help them determine
when their car had a problem and give them the
information to shop around for the best price for
a repair, thus disrupting the relationship with their
usual car repairer
Meeting The Costs
As consumer demand increases for connected
services to be supplied as standard in new vehicles,
major automotive OEMs must absorb the costs
of providing these technologies and innovate at
a higher level. Recent reports have shown that
up to 35% of the total cost of making a new car
goes towards electronics and software, compared
with 20% a decade ago. Also, electronics systems
account for over 90% of innovation and features5
,
which shows that OEMs need to showcase their
digital aptitude to attract future business.

3. FUTURE TRENDS
As car connectivity evolves, there will also be
increased computer-processing power in vehicles.
This means that the car of the future will have a far
greater automotive intelligence.
Autonomous Driving
There is a clear trend among car manufacturers (and
third party organisations like Google) to develop
commercially viable vehicles with the autonomous
driving feature. A Canadian Transport Policy report6
states: “If autonomous vehicle implementation
follows the patterns of other vehicle technologies it
will take one to three decades to dominate vehicle
sales”. Therefore, it is fair to say the trend for
commercially viable, autonomous driving vehicles
has huge potential to disrupt the automotive
industry but the trend will develop only as quickly
as the technology can adapt and governments can
legislate.
More powerful computers will mean autonomous
vehicles will become more intelligent. As already
stated, Audi is working with NVIDIA. This
collaboration resulted in a CPU chip that enabled
a car to autonomously drive over 500 miles and
“initiate lane changes and passing manoeuvres”3
.
With the integration of the chip, the car was
intelligent enough to teach itself manoeuvres, identify
different types of vehicles and identify stationary
pedestrians.
Sensors and Safety
Smart auto OEMs are putting safety at the forefront
of development7
. Future generations of cars will
be able to detect drowsy, drunk, distracted or dead
drivers. There could be alcohol sensors in gear
handles; sensors to detect erratic driving; LED
sensors to detect unusual head movements or
drivers not paying attention and even detection of
heart problems from ECG sensors in the steering
wheel.
Safety will be further enhanced when Vehicle-to-
Vehicle (V2V) communication is established. V2V is
a wireless network that enables automobiles to share
information about what they are doing. This data
includes speed, location, direction of travel, braking
and loss of stability. Currently General Motors,
BMW, Daimler, Honda, Audi and Volvo are actively
developing V2V. The inherent safety aspects of V2V,
combined with the resultant improvements to vehicle
congestion, have led U.S. regulators to start setting
V2V standards for the U.S. which could see the
technology required mandatory by 20208
.
Big Data
Another significant by-product of the connected car
is the large amount of data generated – a single
vehicle can produce terabytes worth of rich data.
Car companies will be able to use the data to
make improvements to their products and services.
Marketers will also have a great opportunity to target
consumers at multiple touchpoints throughout their
journeys.
Insurance companies will potentially make use of
driver’s data and offer reduced insurance premiums
for those people who are deemed safe drivers.
Dieter Zetsche, CEO of Mercedes-Benz stated “it
seems possible that insurance companies might offer
a bonus based on driver behaviour, if you allow them
access to that data”9
. Of course, what data is made
public and how it is used will need to be legislated by
individual governments.
image reference : http://cdn.phys.org/newman/gfx/news/hires/2011/
image reference : http://www.extremetech.com/extreme/176093-v2v-what-are-vehicle-to-
vehicle-communications-and-how-does-it-work

4. Car Sharing
With congestion a major problem and source of
pollution in urban areas, people may choose not
to own a vehicle at all. Zipcar, Avego’s share with
a stranger; GoLoco friend share, peer-to-peer
Relayrides and Uber’s powerful on-demand service
suggest the appetite is there already. Furthermore,
Deloitte predicted that by taking 10% of lone drivers
into a rideshare scheme, almost 16 million single
drivers would be removed – giving a reduction of 757
hours of congestion time and a 2% drop in carbon
emissions10
. With connectivity, geolocation and other
technologies this is logistically possible.
image reference : http://www.godcgo.com/home/ways-to-get-around/car/car-sharing.aspx
●● Re-structure organisations to allow connected-car groups to work alongside electrical engineers. These
agile, cross-functional teams will ensure that the hardware and software required for connectivity all fit.
●● Establish partnerships with a new supply chain consisting of mobile-telecoms operators; networking
equipment manufacturers; developers of V2V technologies; producers of consumer hardware and
systems; software firms and creators of mobile apps.
●● Make the software and data open source.
●● Ensure vehicle telematics can interface with wearable technologies and other consumer technology
trends, such as nest home heating devices.
●● Work in collaboration with city planners, road planners and governments to help provide the necessary
infrastructure to make V2V and autonomous driving vehicles a reality.
●● Ensure processes are implemented to capture and analyse the big data produced by the connected
car
Recommendations
●● Changing customer habits and expectations are causing manufacturers to rethink how they build and
sell vehicles. With the new trends emerging in the industry, automotive companies need to invest
in innovation, product design, business intelligence, advanced analytics and develop cost-efficient
infrastructure.
●● Companies must build on strategies that: Respond to the redefined reality of personal mobility, Connect
with the sophisticated consumer of the next decade and Build new cohesive enterprise ecosystems
●● Successful companies will be the ones who can adapt to these trends and discover how to treat them
as opportunities in the coming decade.
Conclusion
1. TCS Report – Digitization for Auto Companies
2. Techcrunch.com/2014/10/03/from-model-t-to-4g-
how-connectivity-is-revolutionising-the-car
3. Car Tech Trends at the 2015 Consumer
Electronics Show, Edmunds.co
4. Telefonica: Connected Car Industry Report 2014
5. Strategyand.pwc.com/perspectives/2015-auto-trends
6. Autonomous Vehicle Implementation Predictions,
Victoria Transport Policy Institute (vtpi)
7. Globalchange.com/future-of-the-auto-
industry-cars-vehicles-drivers.htm
8. What are vehicle to vehicle communications,
Extremetech.com
9. Autonomous Cars – is this the end of driving? The Telegraph
10. Dupress.com/articles/digital-age-transportation
References