Looking towards 2030: disruptive technology trends in the automotive industry

May 06, 2022
  • IT
  • automotive
  • SAP

Today's economies are radically changing, triggered by the development of emerging markets, the accelerated rise of the new technologies, sustainability policies, and the evolution of consumer preferences in terms of ownership. Digitization, increasing automation, and new business models have revolutionized other sectors; the automotive sector isn't an exception in this context. According to a report by McKinsey, these forces have triggered several disruptive technology trends in the automotive sector such as diversified mobility, electrification, and software connectivity/competency.

What to expect?

Most sector players and experts agree that several trends will reinforce and accelerate each other, and that the automotive industry will face a disruptive change in the upcoming years. In this blog, we take a look at the future changes and how they will affect the manufacturers, traditional vehicle suppliers, potential new players, regulators, dealers, consumers, markets, and the automotive value chain. Of course, these forecasts should be interpreted as a projection of the most probable hypotheses.

Developing business models at full speed

According to McKinsey, the automotive industry’s revenues will be diversified into on-demand mobility services and data-driven services. Connectivity and autonomous technology will increasingly transform the car into a platform on which both drivers and passengers can use their time to consume new types of media and services or use this "free time" for other personal activities. The ever increasing speed of innovation, especially in software systems, will require an upgrade of car models. 

The evolution of consumer preferences, stricter regulations, and technological breakthroughs are part of a fundamental change in individual mobility behavior. We see, for instance, that individuals often use multiple means of transport during one trip.

Nowadays, consumers are using their cars as multi-purpose vehicles, whether they are driving to work alone or taking their whole family to the beach. In the future, they might want the flexibility to choose the best solution for a specific purpose, on demand and by means of their smartphone. With regard to technology, tech players specialized in the automotive industry such as delaware, will also play an increasingly important role.

Electric vehicles are becoming viable and competitive

Stricter emission regulations, lower battery costs, a more broadly available charging infrastructure, combined with a growing consumer acceptance will create a new and strong momentum for electric vehicles (hybrid, plug-in, battery-electric, and fuel-cell vehicles) in the coming years. The adoption speed will be determined by the interaction between consumer attraction (partly due to the total cost of ownership) and regulatory pressure, which can considerably vary at regional and local level.

Thanks to the permanent improvement of battery technology and the cost, these local differences will become less explicit and electrified vehicles are expected to gain more and more market share compared to conventional vehicles.  A paradigm shift towards mobility as a service, with some newcomers, will inevitably force the traditional automotive manufacturers to compete on several fronts.

Software competency

In another revolutionary development, software competency is increasingly becoming one of the industry's most important differentiators for various areas (ADAS/active security, connectivity and infotainment). Subsequently, since cars are more and more being integrated in the connected world, the manufacturers will have to participate in the new mobility ecosystems.

The historic operators of the automobile industry can’t predict its future with certainty. However, they can take strategic measures from now on in order to stay ahead of its evolution. The existing players should try to anticipate the change that's coming and implement a three-part strategic approach.

  1. Be prepared for uncertainty: in order to succeed in 2030, the automotive players will need to switch to an ongoing process of anticipating the new market trends. delaware, for instance, intends to collaborate with players in the automotive industry in order to help them identify the applications, solutions, and tools best suited for their business model.
  2. Take advantage of partnerships: in order to succeed, the car manufacturers, suppliers, and service providers must unite or participate in ecosystems. Go for innovation in order to differentiate yourself from your competitors! Partnerships with OEM players can result in interesting co-innovation programs. If they are efficiently managed, they will shorten the investment cycles and foster the exchanges. Powerful PLM tools will allow companies to become more agile while complying with the requirements of partners.
  3. Lead a transformational change: since innovation and product value are ever more being defined by software, OEMs must align their skills and processes in order to take on new challenges. These can vary from offering value to the consumers to cybersecurity, data confidentiality, and ongoing product updates. The automotive industry is characterized by increasingly integrated flows, which requires compliance with the standards and strict requirements for all players in the supply chain. delaware can carry out the most innovative projects integrating concepts such as artificial intelligence, smart robots, RFID, IoT, ... All these elements are thoroughly revolutionizing the automotive industry.

The correct management of the flows in the automotive sector (JIT, JIS, advanced stores, packaging...) and of the business processes as well as the mastery of the tools and standards (EDI, RF, RFID, labeling, traceability...) are some of the key factors that will allow the different players to interact and become more efficient and competitive.

Innovation is key if companies want to meet the major challenges of the new technologies, such as electric or autonomous cars and connectivity.

Dedicated to the automotive industry, FAST-Automotive is a preconfigured solution focusing on Tier 1 and 2 equipment manufacturers, car manufacturers, and dealers who wish to quickly implement a solution meeting the sector’s requirements.

ERP template for the automotive industry, based on SAP S/4HANA

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