There is clearly a growing need and expectation for digital reinvention among consumers, especially automakers. Lately, there has been a greater focus on reducing emissions through EVs, AI-powered dynamic pricing, and a more personalized approach at the dealer level.
The automotive industry is embracing a software-defined future and realigning its operations around digital capabilities and experiences. AI systems and automation technologies are being used to redefine brand values.
Industry executives around the world are expecting a massive transformation from the in-car experience to the core of vehicle control and functionality. Seventy-four percent of executives surveyed by the IBM Institute for Business Value believe that cars will be software-defined and powered by AI by 2035.
Most companies are now focused on fundamental software-defined vehicle (SDV) technologies and processes that incorporate AI across all aspects. These car companies and their executives are turning to AI to increase the perceived value of their products and increase their competitive advantage.
The industry is moving from machine-driven to software-driven business models, which requires a fundamental shift in traditional thinking and automakers must adapt. Historically, automakers’ brands have been built on design, function, and safety. However, with SDV, the focus has shifted to a more data-driven driver and passenger experience. Which would lead management to nearly triple the R&D budget for software and digital investments?
“Management teams expect multiple recurring revenue streams from SDV-related capabilities such as self-driving, immersive in-car entertainment, and remote diagnostics. However, the dizzying pace of technological advancements makes it difficult to predict customer expectations 10 years from now,” says the IBM Business Value Institute report.
The future of AI in the automotive industry will redefine digital experiences and help automakers differentiate themselves from the competition. Through AI-driven software, automakers can create brand-winning customer experiences and gain a deeper understanding of their customers’ needs and desires.
