Digital technology will drive change in the auto industry, IBM Corp. said, citing surveys of consumers and industry executives.
“Radical change is coming fast for the global automotive industry,” IBM said.
The IBM Institute for Business Value surveyed more than 11,500 consumers in eight countries and 1,500 industry executives in 11 nations.
Half of executives said “to succeed or even survive they need to reinvent their organizations with digital technologies,” according to an IBM report about the surveys. Forty-two percent of the executives “have a high sense of urgency.”
What’s more, IBM said the surveys show that consumer attitudes may change as self-driving technology takes hold.
“Traditional descriptions of how consumers experience the vehicles focus on aspects of driving their cars,” IBM said. “But vehicles are transitioning to being more automated and autonomous. Less time is spent driving and more time is available for occupants to do other activities. Their focus inevitably turns from driving the car to the digital experience inside the vehicle.”
To be sure, the path to self-driving vehicles isn’t a sure one. Automakers and tech companies are both seeking to develop such vehicles. It’s also uncertain how quickly the technology will be adopted. Commercial fleets, where vehicles travel predictable routes, may be early adopters.
The IBM report indicates there may be an urban-rural divide concerning autonomous vehicles.
“From our results, we see that consumers living in urban settings tend to be higher users of digital technologies than those residing in rural areas,” according to the report. “Sixty-two percent of urban consumers regularly use social media, compared to 55 percent of rural users. Also, 60 percent of urban users use multiple digital devices each day, as opposed to 50 percent of rural users.”
IBM said changing technology, including ride-sharing services, may erode the value of automotive brands.
“One critical question that looms is what happens to the brand in an autonomous, mobility-as-a-service world,” the report said.
Today, almost 70 percent of executives “say the brand is a competitive advantage,” according to the report. “But only 46 percent expert this to be the case by 2030.”
Two-thirds of the surveyed executives, IBM said, expect automakers “will significantly outsource their vehicle production operations to focus on becoming digital companies.” The executives also expect major investments in the Internet of Things (IoT) and artificial intelligence, IBM said.