The digitalization of the automotive sector

With expectations changing of a customer to that of new stakeholders who are entering the industry, the automotive industry is going through a wholesome global digital transformation of its business model.

The digital transformation has been increasing on a daily basis and has encouraged the automotive sector to adopt this technology. As a result, this has improved productivity and efficiency in the automotive sector and helped them increase their profits.

The sales are dipping and are creating a problem for the automotive sector. This has caused stress for many companies, and these companies are trying to find ways to cope with their falling numbers and stress.

The automotive digitalization

With industries moving towards digitalization, it offers a lot of significant opportunities but also some complications too. It has triggered many internal changes that are pushing or forcing automotive companies to move towards being a “customer-oriented” industry.

Another report from the same global management consulting partnership, Cordence Worldwide, has explored and explained how automotive companies are navigating through the rapid changes in the digital business.

In Ireland, many individuals plan to borrow car finance to buy the latest car technology. These technologies are innovative but, at the same time, are expensive and may be difficult for the common person to afford.

Gradually, these innovations will be available to the world at an affordable rate, and everybody can use this technology.

Upcoming Business Models

The level of change that is likely to happen in the automotive industry because of digitalization is not challenging to overstate. Digitalization will definitely reduce the number of accidents, increase vehicle utilization and reduce pollution levels.

As a result, it is evident that almost all automotive groups are now having or setting up digital departments. They help to have strong communication during the digital transformation and approaching the customer.

According to the same Cordence’s white paper, the changes in society are distracting automotive firms from the change they are leading to within their companies.

The increasing mobility market

With digitalization speeding up, the automotive sector’s business model will transform over the coming years. This transformation will bring out new concepts such as car-sharing. It tends to bring a subscription package model.

On the other hand, car and ride-sharing models are also emerging. It caters to the requirements of millennials – the rapidly becoming leading consumer demographics of the automotive industry in the coming future.

Also quoted by one of the managing consultants with Cordence that these ‘old school industries’ are now walking towards creating newer opportunities. Still, they are facing challenges and threats in doing so.

The customer approach that we have discussed above, in fact, is a real challenge for these car companies. It is because this will change the entire business model they run on. They also need them to adjust their mindset to address the customers, a shift from a car manufacturer to a service provider.

Digital customer experience

In today’s highly competitive age of the internet, even top and established companies find holding onto customers through brand loyalty an uphill task.

Consumer behavior has been changing due to so much digital expansion and disruption. Hence, force marketing strategists to reconsider and make amendments to their old and possibly lacking (if not outdated) strategies.

Modern customers are educated and know how to use a digital or online tool (from an increasing array of tools available) and online databases. They are now quickly and conveniently comparing prices, availability and product-related reviews to compare between products.

The automotive sector is no left out of this trend. Aware customers are using online tools and databases to compare and check to make an informed choice.

And hence to adapt to this trend, even car companies would need to:-

  • Change their business model
  • Move away from product-centric ideology to customer-centric
  • Focus more on service providers and consumer satisfaction

As an automotive company, one cannot expect customer loyalty only with good products or brands. Good servicing and customer satisfaction will help you conquer and re-conquer a customer.

The offers and services now have to be made global, digital, and customized. The offers must adapt to customers.

The underline issue remains the building of customer loyalty through tailor-made customer experience through the usage cycle of the automobile (car product). It starts from purchase to driving to maintenance and even at the last end of the product cycle, i.e. trade-in of the vehicle.

Connectivity is one of the ways which will benefit from a tailor-made experience in the automotive industry. Consumers now want new connective features in their automobiles. They are even willing to pay additional for emergency, infotainment, and maintenance services.

Even the interest has been seen in paying a little extra for navigation services in dream cars. This will not only satiate consumer desire but also enable companies to gather rich customer data. It will help them render offerings to consumer behavior.

New automotive segments

With the advent of digital transformation, there is the rise of complete new application areas in the industry.

One of the most common examples is the self-driven cars, where the last steps of the cycle are undertaken by technology companies such as Tesla, not the automotive companies.

This has given these tech companies an edge in the market. However, keystone automotive companies will still plunge into the market by themselves, leveraging their prowess in car making and substantial production capabilities.

Use digital for steering the activity

Internet of Things is the new rise. Infusing this tech with future cars is likely the new rapid change in the automobile business model.

And hence unearths the opportunity of making partnerships to improve the connectivity with tech companies with cars to provide the tech-related services in the automobiles.


Technology has helped in transforming the automotive world and offered innovations to the world. With these innovations, the world is experiencing better automobiles and is moving towards a better future.

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