There are major inconsistencies in automotive industry digital strategy – but also major opportunities, reports a global study by BearingPoint, a management and technology consultancy (developed from the former KPMG and Arthur Andersen consultancies).
The research, carried out March-April 2018 included the survey of 90 automotive sector executives across Europe, Asia and the US, as well as, for comparison, 435 in telecoms, transport, banking, insurance and elsewhere in automotive. It found that 50pc of automotive companies had clearly-defined digital business strategies in place and under implementation, with 49pc still in the planning phase; and that 59pc saw innovations in business model, new products and services as key parts of their digital strategies.
However, only 48pc felt that they needed to develop and manage a partner ecosystem, 70pc thinking that this could lead to consumer confusion. Despite this, 46pc thought that partner ecosystems would deliver a revenue growth of over 16pc in two years, and 24pc of that proportion predicted a 21-30pc revenue growth, since partner ecosystems would help them generate new revenue streams and more quickly launch new products and customer experiences.
Matthias Loebich, BearingPoint’s global leader, production industries, said in the report summary: “Automakers understand the impact that emerging technologies trends like connected cars, autonomous drive and mobility-as-a-service will have on their businesses. Many also understand the need for partners who can marshal investment, IP assets and provide complementary digital skills and capabilities.
“But a slim majority – 52pc – are living in the past, clinging to a world in which a ‘walled garden’ protected innovation from competitors. Shedding this default mindset is the number one challenge for automotive companies who want to capitalize co-innovation and the digital ecosystem business model opportunity.”
At the moment, 29pc of automotive companies are partnering with ‘digital disruptors’, and 41pc will be doing so in the next two years, the report found – but only 59pc has the right technology in place to manage monetization across the partner ecosystem. Further challenges included IT structures built on traditional linear value chains (57pc) and difficulty identifying the right technology to manage partners and overcome complex IT environments (48pc).
Angus Ward, BearingPoint CEO of digital platform solutions, added: “Slow execution of digital strategies reflects conservative views on owning the customer relationship and collaboration in the automotive sector. Automotive companies have relied on franchise dealerships to own the customer relationship.
“In digital, having a full view of customer needs and using it to drive co-innovation with a complimentary set of ecosystem partners is how the model works. But in today’s digital world, where the competition is not only traditional automakers but giant web-scale technology companies, they must more rapidly embrace open ecosystem collaboration with multiple partners to get that breadth of innovation.”
The report is titled ‘Partnership ecosystems: the driving force behind mobility innovation?’ and is available at bearingpoint.com.