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A digital transformation is underway which is significantly disrupting traditional industrial markets and companies. The Roland Berger strategy consulting firm predict that by 2025, Europe could see its manufacturing industry add gross value worth 1.25 trillion euros (£902bn) due to digital transformation.

Nowhere is this more evident than in the automotive industry where new technologies are being introduced which transform the driving experience and introduce new efficiencies into manufacturing processes.  

IoT and the automotive industry

Many models of cars have already incorporated IoT (Internet of Things) technology. Highly automated and autonomous driving vehicles using IoT technology from Audi, BMW and Mercedes were demonstrated at the Consumer Electronics Show in Las Vegas earlier this year. Tesla achieved a first in the automotive industry when they pushed a safety software update to raise all Model S cars 1 inch on the highway. The ability to do updates remotely saves Tesla the costs and customers the time and aggravation of bringing all the cars into their local dealership service departments.

The connected car has even made its way into legislation across Europe. The EU has set a target to implement an IoT connected car application by early 2018 to improve road safety. eCall, an initiative to bring rapid assistance to motorists involved in a collision anywhere in the European Union, will send a 'Minimum Set of Data', including the exact location of a crash automatically even when passengers are unconscious or incapacitated due to injuries.

Digital transformation behind the scenes

Even when digital transformation doesn’t change the driving experience, it can increase efficiencies to improve manufacturing processes or streamline the supply chain to indirectly improve a manufacturer’s competitiveness.

For example, Porsche streamlined the production of their cars to minimise waiting times. Parts are delivered hourly and are tracked in real-time, so any short-notice changes can still be incorporated smoothly. This allows customers to change their car specifications until the last minute, the ultimate level of personalisation.

Emerging systems plan to use data collected by connected cars to improve their services. For example, traffic management systems can provide more accurate instructions to avoid traffic jams and accidents based on real-time data collected from connected cars. Automotive parts manufacturers can benefit from data about wear and tear to pre-order a replacement part and notify the driver before there is an equipment failure. Car sharing apps can use real-time location information to encourage car pools.

It takes a village

The promise of the connected car is dependent on many things including: a high-quality broadband network, IoT components and standards, multiple IT systems (CRM, ERP, WMS) and a core production system to analyze, report, act on the collected information. All these systems need to work together in order to add value.

Standards need to be established to ensure that data can be rolled up and shared between systems. In addition, policies need to be established to define who owns data generated by vehicles, to guarantee driver privacy, and to protect connected cars from cyberattacks. Hacking into connected cars has become a major issue, evidenced by Fiat Chrysler Automobiles (FCA) recently announcing it will patch 1.4 million US vehicles following the reveal of a hacking method by Wired.

The significance and potential for the connected car is fostering collaboration between the automotive industry and technology and IoT vendors. Volkswagen, Fiat, Renault and other European manufacturers have joined the Open Automotive Alliance (OAA). This Google-led community is developing a shared platform for the connected car in order to be able to integrate automotive navigation data and infotainment.

Nokia hosted a forum comprised of 16 auto industry companies where participants discussed a range of technical issues, including defining a common format for transferring information, security, anonymity, and the accuracy and efficiency of data transmissions.

Assuming there are standards in place, there also needs to be methods for quickly developing secure and reliable connected car applications that can accommodate extreme amounts of data and transactions. Easy to use data and business process integration tools that manage connectivity between internal and external systems and regulatory authorities will be critical for rapid development of interrelated connected car applications. This type of middleware provides the glue that holds that whole system together and can also help reduce development costs and risks.

The Internet of Things is a key technology for the automotive industry. Having standards and middleware for collecting and integrating data will accelerate development of new solutions that can generate competitive differentiators for automobile manufacturers and revolutionise the driving experience.