CASE in terms of Digital Transformation: Automotive Mobility

The sustainability agenda due to global warming, technological developments, and changing consumer behaviors and expectations necessitate digital transformation in the automotive industry. In the automotive industry, original equipment manufacturers (OEMs) are establishing new units with a wave of co-operation and investments are being carried into the future. Although vehicles are not yet ready for mass demand due to the difficulties that arise during the development phase, R&D activities continue at “full throttle”. When connected, autonomous, shared and electric vehicles (called CASE in the industry) are finally ready for the mass market, it will mean a redistribution of the cards for market actors and operations. The digital transformation scorecard that will emerge in this process will determine the future of OEMs in the market.

A major digital transformation awaits the automotive industry as it moves beyond traditional automotive to digital platforms with many cloud providers, product suppliers and technology service providers. Many components and parts used in internal combustion engine vehicles will not be available in electric and autonomous vehicles, which are considered the next technology. The rise of CASE vehicles will be fuelled by high digital technology such as cloud, artificial intelligence (AI) and the Internet of Things (IoT). The traditional trillion-dollar automotive industry is transforming into a mobility ecosystem blended with new digital technologies and innovation. Automotive companies are rapidly transforming their business processes and focusing their investments on digital transformation to develop new business models and services. As such, all eyes are on developments in the automotive world and supporting technologies.

Connected Vehicles: A vehicle that is connected to the Internet is defined as a “connected vehicle”. The working principle of recent connected vehicles is based on a common network of interconnected routers. With the introduction of 5G networks, which are frequently used in the world, it becomes possible to obtain huge bandwidth with a single module in theory. Developments in mobile communication technologies such as 5G and 6G are expected to pave the way for high-security autonomous driving applications with deep cooperation such as low access time broadband communication infrastructure and sharing of sensor data between vehicles. Connected vehicles enable a coordinated operation process, especially in fleet management. This will provide great advantages in land logistics, which are important actors in the supply chain.

Autonomous Vehicles: Autonomous vehicles are defined as the peak in autonomous technology, with driverless vehicles as the ultimate goal. In fact, 6 different levels of autonomous vehicles are defined due to differences in quality:

Level 0: This is the level that does not include automation technology and is completely under driver control. Level 1: Includes basic driver aids (lane keeping system, brake assist, cruise control, etc.).

Level 2: Acceleration, deceleration and steering control of the vehicle is autonomous, the driver only monitors environmental conditions.

Level 3: Environmental conditions are controlled autonomously, with the ability to brake in the face of obstacles. Obstacles such as obstacles and weather conditions require driver control.

Level 4: This is the level reached today. All stages are autonomous. Although it is being worked on for extreme scenarios, a definite success has not yet been recorded.

Level 5: This is the level without driver intervention, aiming for full automation. For this level, where there will be no driver element, innovations are needed for the training of machine learning models.

Shared and Electric Vehicles: 

Electric vehicles are vehicles that, unlike their counterparts with internal combustion engines, do not require petrol and derivative fuels and operate on the principle of providing power to the electric motor through sets of lithium ion and similar batteries. By installing the application of the sharing platform on mobile phones, with the system of shared charging at certain stations, the cost is lower than traditional vehicles running on fossil fuels and it is today’s favorite technology because it is environmentally friendly as it does not cause carbon emissions.

The automotive industry is gaining a completely different dimension with critical, global agendas such as sustainability and changing consumer behaviors. CASE Era; new business models are at the door with mobility where artificial intelligence forms the infrastructure and network. According to McKinsey’s report, digital services will account for 46 per cent of the automotive industry’s turnover growth by next year. Looking at this major development, it is predicted that the 2020s will take the automotive industry to a completely different point. On the other hand, in order to survive this race and stay on the competitive stage, automotive companies need to adopt a transformation in their IT infrastructure and operations based on solutions such as agility, simultaneous customer engagement, common units to collaborate with each other and enhanced service delivery.

Many automakers are aligning their innovation strategies with the digital transformation that is revolutionizing the automobile. According to the PwC research company, by 2030, the total profit rate of traditional car and spare parts sales and after-sales will decline from 70 per cent to 55 per cent, and new profit shares will increase from 5 per cent to 25 per cent. The digital transformation performance of automotive brands will largely determine how much they will be in the market in the future.

According to Boston Consulting, 500,000 jobs will be lost in companies producing parts for internal combustion vehicles in Europe, and 300,000 jobs will be created in companies supplying new generation zero emission vehicles. As artificial intelligence will facilitate the use of artificial intelligence in automotive, requirements in this area will change and new specializations and specialized services will develop. This will mean that new professions will develop in parallel with the transformation, while skilled labor will gain importance in employment.

Buying a vehicle to use for a few years and selling it afterwards will be left behind. Experts state that vehicles will be acquired through digital sales and monthly payment systems. This new era, in which insurance, repair and similar after-sales services will be paid in monthly instalments and the qualities of vehicles will change rapidly, is called the third wave in the automotive industry.

Today, the entire sector will be reshaped with the digital transformation that will contribute to the solution of multiple problems such as the battery or chip crisis or energy costs. The transformation will accelerate as future innovations will be realized by software components. Companies will need to adapt their operations and employees to this speed and depth of development. On the automotive supplier side, new business models, services or methods will need to be developed and operations will need to be hyper-fast and flexible. A radical transformation wind that will differentiate with new business models, collaborations, specializations and products is at the door. Those who will sail with this wind will be those who open their doors to digital transformation with the right strategy and investment.