Clarity comes in different packages. While there will always be factors at play in the work truck industry, it’s best to understand and gain insight from a variety of sources. Here are five predictions.
1. TECHNOLOGY WILL BE CRITICAL FOR COMBATING UNCERTAINTY
The auto industry is facing significant uncertainty due to various factors: inflation and a potential recession, geopolitical tensions and wars, a slowing EV adoption rate, the development of various alternative energy solutions including hydrogen and e-fuels, continuing cost pressures, and an upcoming U.S. presidential election that could materially impact industry direction. To address these and similar challenges, companies will increasingly turn to information technology to deliver operational efficiencies and resilience. Furthermore, there will be a greater emphasis on intra- and inter-enterprise collaboration to mitigate risk and improve resilience.
2. LEGACY IT SYSTEMS WILL GIVE WAY TO MODULAR, DATA-DRIVEN DIGITAL PLATFORM
Siloed and heavily customized on-premises legacy IT systems will increasingly become unable to support the needs of the rapidly evolving, data-driven automotive ecosystem and as such, represent significant business risk. Risky, complex, and expensive one-size-fits-all ERP projects will be abandoned in favor of shorter, iterative value delivery cycles tightly aligned to business metrics. Automotive companies will look to industry-specific, interoperable, cloud-based digital platforms that enable greater end-to-end collaboration, visibility, resilience, and scalability.
3. SUPPLY CHAINS WILL BECOME MORE INTELLIGENT
The supply chain will continue to be an area of risk. To mitigate this, automotive companies will increase supply chain automation through advanced technologies such as artificial intelligence and machine learning (AI/ML) and robotic process automation (RPA). The former can provide probabilistic scenario modeling for various use cases. The latter can automate routine supply chain processes, freeing up resources to focus on analysis and decision-making.
4. SUSTAINABILITY INITIATIVES WILL SEE GREATER INVESTMENT
Stringent environmental regulations will require automakers and their suppliers to implement comprehensive carbon capture and reporting technologies or face potential financial penalties and damage to their reputations. Consumers—especially in the luxury and near-luxury segments—are factoring a brand’s environmental stewardship into their purchasing decisions. Hence, while sustainability is an additional cost, it can also provide competitive differentiation in certain markets and segments.
Accordingly, the industry will increasingly target key demographics with messaging that aligns with customer expectations and will increase financial commitments to sustainability initiatives. Technology that enables cross-value-chain collaboration and data capture and extends that capability beyond the organization’s four walls to the broader ecosystem, will again play a pivotal role in bringing sustainability programs to fruition.
5. AI WILL SEE GREATER ADOPTION ACROSS VARIOUS AREAS OF THE AUTOMOTIVE VALUE CHAIN
As a result of its ability to understand context and intent, AI will play an increasingly key role in delivering a highly personalized in-vehicle user experience. For example, if it knows that one must drive to an appointment tomorrow morning, it can check the weather forecast and typical traffic patterns, recommend a departure time, and even suggest a place to grab a coffee on the way. Mercedes Benz is already piloting a ChatGPT-based in-vehicle voice-based system to deliver such curated experiences, and other luxury brands have similar plans in the works.
As vehicles become increasingly software-defined, AI will help to accelerate software development by acting as an assistant or co-developer with human coders. By some estimates, this could reduce the time for each software release by up to 50 per cent, possibly more. AI will also be able to proactively and continuously optimize the software development process, while taking the human aspect into account as well.
AI will help bring new vehicles to market faster by shortening product development time. Counter-intuitively, generative AI is very adept at providing innovative and creative ideas that can accelerate the time taken to develop and evaluate new concepts. AI can also rapidly factor in customer feedback, real-world vehicle operational data, warranty performance data and the like when ideating new vehicle designs and performance characteristics.
AI’s role will expand into vehicle testing and validation. In combination with digital twins, it will enable increasingly sophisticated crash testing and scenario modeling, reducing the need for physically destructive testing.
ABOUT THE AUTHOR
Peter Maithel is an automotive industry principal at Infor. Find out more at www.infor.com.
